This chapter shall be known, and may be cited, as the Climate Innovation Program.
Chapter 7.2Climate Innovation Program
Section § 25625
This section simply names the chapter as the 'Climate Innovation Program.'
Climate Innovation Program California environmental initiatives sustainability projects eco-friendly innovation green technology programs state climate policy environmental improvement carbon reduction strategies renewable energy projects climate change solutions environmental legislation sustainable development initiatives eco-innovation state-funded environmental programs clean energy advancements
Section § 25625.1
This section defines key terms used in the chapter. A "California-headquartered company" is a business with its main office and management in California. The "Climate Innovation Program" refers to specific activities outlined in the chapter. "Financial incentive" covers contracts, grants, or other funding. A "Liquidity Event" happens if a company receiving financial incentives goes public or has a major change in ownership. The commission can identify other scenarios as liquidity events, especially if a company was already trading before the incentive. "Regenerative agriculture" describes farming methods that prioritize ecological health over high yields.
For purposes of this chapter, the following definitions apply:
(a)CA Public Resources Code § 25625.1(a) “California-headquartered company” means a corporation or other business form organized for the transaction of business that has its headquarters in California. For multinational corporations, the term means the United States-based headquarters is in California. For purposes of this definition, headquarters means the location where the corporation’s executive management and key managerial and support staff are located, and from where the corporation is managed.
(b)CA Public Resources Code § 25625.1(b) “Climate Innovation Program” means the activities described in this chapter.
(c)CA Public Resources Code § 25625.1(c) “Financial incentive”
includes, but is not limited to, a contract, grant, or other appropriate funding measure.
(d)Copy CA Public Resources Code § 25625.1(d)
(1)Copy CA Public Resources Code § 25625.1(d)(1) “Liquidity Event” means an event during the term of a financial incentive under this program, or within 10 years after the financial incentive ends for any reason, in which the recipient has an Initial Public Offering.
(2)CA Public Resources Code § 25625.1(d)(2) If the recipient has a change in ownership that results in a greater than 50- percent change in the company’s capitalization table the commission, at its sole discretion, may determine that the particular change in ownership constitutes a “Liquidity Event”. The change in ownership that results in greater than 50-percent change in the company’s capitalization table includes both single-event changes or cumulative changes greater than 50-percent.
(3)CA Public Resources Code § 25625.1(d)(3) In the case of a recipient whose
stock is publicly traded before receiving the financial incentive, the commission may determine alternate conditions that would constitute a “liquidity event.”
(e)CA Public Resources Code § 25625.1(e) “Regenerative agriculture” means agricultural practices that focus on the health of the ecological system as a whole and not solely on high-production yields.
California-headquartered company Climate Innovation Program Financial incentive Liquidity Event Initial Public Offering change in ownership commission discretion regenerative agriculture ecological system health capitalization table change multinational corporations funding measures corporate management location stock trading alternative liquidity conditions
Section § 25625.2
This law requires the California commission to set up the Climate Innovation Program, offering financial incentives to California companies for tech advancements in line with the state's climate goals, like reducing greenhouse gases and boosting resilience against climate change impacts. Companies must be headquartered in California, but the law allows out-of-state companies to qualify if they agree to relocate, especially if they come from states with discriminatory laws. The program calls for collaboration with California public universities and prioritizes tech projects that help the state’s climate efforts, attract federal funding, and aren't covered by other programs.
Fund recipients need to report job creation and environmental benefits. The commission will oversee projects, enforce agreements with set performance metrics, and may require repayment if conditions aren't met, though some projects, like those involving lithium extraction, may be exempt from repayment. A competitive process will be used to award incentives, with some leeway for noncompetitive awards to follow-up projects that have shown promise. Additionally, all awarded funds must be used for California-based projects.
(a)CA Public Resources Code § 25625.2(a) The commission shall establish and administer the Climate Innovation Program to provide financial incentives to California-headquartered companies for developing and commercializing technologies that provide technological advancements that either help California meet its greenhouse gas reduction targets and achieve its climate goals on an accelerated timeline and at a lower cost, or enable the state to be more resilient to the impacts of climate change such as drought and wildfire.
(b)CA Public Resources Code § 25625.2(b) In administering the Climate Innovation Program, the commission shall do all of the following:
(1)CA Public Resources Code § 25625.2(b)(1) Award funds to California-headquartered companies.
(2)Copy CA Public Resources Code § 25625.2(b)(2)
(A)Copy CA Public Resources Code § 25625.2(b)(2)(A) Award funds to research teams consisting of California-headquartered companies working jointly with California public university students, faculty, or researchers at a University of California or a California State University facility, including innovation hubs, Innovation and Entrepreneurship Centers, or California Institutes for Sciences and Innovation, as provided through a memorandum of understanding or contract between the California-headquartered company and these public entities.
(B)CA Public Resources Code § 25625.2(b)(2)(A)(B) Notwithstanding subdivision (a), eligible applicants may include corporations or other business entities that enter into written agreements with the commission that the company will relocate its headquarters to California and comply with the requirements of this chapter if granted an incentive, from a state that has enacted a law that does any of the following:
(i)CA Public Resources Code § 25625.2(b)(2)(A)(B)(i) Voids or repeals, or has the effect of voiding or repealing, existing state protections against discrimination on the basis of sexual orientation, gender identity, or gender expression.
(ii)CA Public Resources Code § 25625.2(b)(2)(A)(B)(ii) Authorizes or requires discrimination against same-sex couples or their families, or discrimination on the basis of sexual orientation, gender identity, or gender expression.
(iii)CA Public Resources Code § 25625.2(b)(2)(A)(B)(iii) Creates an exemption to antidiscrimination laws in order to permit discrimination against same-sex couples or their families, or permit discrimination on the basis of sexual orientation, gender identity, or gender expression.
(iv)CA Public Resources Code § 25625.2(b)(2)(A)(B)(iv) Denies or interferes with, or has the effect of denying or interfering with, a woman’s right to choose to bear a child or to choose and obtain an abortion, as
provided by Article 2.5 (commencing with Section 123460) of Chapter 2 of Part 2 of Division 106 of the Health and Safety Code.
(3)CA Public Resources Code § 25625.2(b)(3) Conduct a stakeholder-driven process to identify and prioritize investments in technological advancements for the Climate Innovation Program that:
(A)CA Public Resources Code § 25625.2(b)(3)(A) Provide the greatest potential benefits to the state’s climate goals, including, but not limited to, zero-emission transportation, lithium processing, manufacturing, and recovery, regenerative agriculture, and drought and wildfire prevention.
(B)CA Public Resources Code § 25625.2(b)(3)(B) Are not sufficiently addressed by other funding programs.
(C)CA Public Resources Code § 25625.2(b)(3)(C) May leverage and attract significant federal funding to California.
(4)CA Public Resources Code § 25625.2(b)(4) Negotiate with an eligible
applicant the terms and conditions of proposed written agreements that provide the financial incentives allowed pursuant to this chapter. The written agreement may include such terms and conditions as required by the commission, including, but not limited to, requiring repayment of some or all of the financial incentive over a period of time determined in the written agreement.
(5)CA Public Resources Code § 25625.2(b)(5) Provide the negotiated written agreement to the commission for its approval at a duly noticed public meeting held in accordance with the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code), including the proposed terms and conditions from paragraph (4).
(6)CA Public Resources Code § 25625.2(b)(6) Post on its internet website all of the following information:
(A)CA Public Resources Code § 25625.2(b)(6)(A) The name of each
applicant granted a financial incentive under this chapter.
(B)CA Public Resources Code § 25625.2(b)(6)(B) The estimated amount of the investment by each applicant.
(C)CA Public Resources Code § 25625.2(b)(6)(C) The estimated number of jobs created or retained.
(D)CA Public Resources Code § 25625.2(b)(6)(D) The amount of the financial incentive granted to the funding recipient.
(E)CA Public Resources Code § 25625.2(b)(6)(E) The amount of the financial incentive recaptured from the funding recipient, if applicable.
(7)Copy CA Public Resources Code § 25625.2(b)(7)
(A)Copy CA Public Resources Code § 25625.2(b)(7)(A) Include a term requiring the recipient, if there is a liquidity event, to repay the full amount of the financial incentive plus an additional percentage. The additional percentage shall be set at 20 percent. The commission and recipient may enter into a repayment plan for the recipient to make the repayment over time
instead of the recipient making a one-time payment. The percentage may be increased to the extent the recipient fails to meet the performance metrics it agrees upon with the commission.
(B)CA Public Resources Code § 25625.2(b)(7)(A)(B) Each financial incentive shall include performance metrics, including jobs created and environmental benefits, and may include other metrics, including, but not limited to, follow-on investment, patents filed, and estimated benefits to California based on a reasonable estimate of market adoption.
(C)CA Public Resources Code § 25625.2(b)(7)(A)(C) The commission shall exempt from the repayment term in subparagraph (A) a “producer,” as defined in Section 47002 of the Revenue and Taxation Code, that pays a lithium extraction excise tax pursuant to Section 47010 of the Revenue and Taxation Code.
(D)CA Public Resources Code § 25625.2(b)(7)(A)(D) The commission may exempt projects from the repayment term in subparagraph (A) if
it is prohibited by a recipient’s existing or announced federal award.
(8)Copy CA Public Resources Code § 25625.2(b)(8)
(A)Copy CA Public Resources Code § 25625.2(b)(8)(A) Establish a process for selecting and overseeing projects funded through the Climate Innovation Program to ensure financial incentives are used to advance technologies that help meet the state’s climate goals.
(B)CA Public Resources Code § 25625.2(b)(8)(A)(B) The process described in subparagraph (A) shall include developing criteria for awarding financial incentives and providing oversight over funded projects.
(9)CA Public Resources Code § 25625.2(b)(9) Require each recipient to report on the number of jobs created and the project’s measurable environmental benefits. The commission may require each recipient to report on other specific, measurable performance metrics, including, but not limited to, follow-on investment, patents filed, and estimated benefits to California based on a reasonable
estimate of market adoption, as determined by the commission.
(10)CA Public Resources Code § 25625.2(b)(10) Maintain an online database that includes, but is not limited to, a brief description of each project for which funding was awarded, including the name of the recipient, the amount of the award, and the outcomes of the funded project.
(11)Copy CA Public Resources Code § 25625.2(b)(11)
(A)Copy CA Public Resources Code § 25625.2(b)(11)(A) Solicit applicants and award financial incentives using a competitive award process. The commission may noncompetitively award follow-on financial incentives to awardees of a prior competitive award process.
(B)CA Public Resources Code § 25625.2(b)(11)(A)(B) The commission may use the competitive award process of another organization to award funds or provide follow-on funding for a company previously selected through a competitive process for the purpose of attracting significant federal or private funding for the projects or for the
purpose of accelerating the delivery of program benefits.
(C)CA Public Resources Code § 25625.2(b)(11)(A)(C) Notwithstanding any other law, in its discretion, advance up to 25 percent of the financial incentive awarded pursuant to this chapter, in a manner consistent with Section 11019 of the Government Code.
(12)Copy CA Public Resources Code § 25625.2(b)(12)
(A)Copy CA Public Resources Code § 25625.2(b)(12)(A) Without limiting any other rights and remedies available to the commission, the commission may include the following repayment term:
“Without limiting any of its other remedies, the commission may, for recipient’s noncompliance of any financial incentive requirement, withhold future payments, demand and be entitled to repayment of past reimbursements, or suspend or terminate this financial incentive. The tasks in the scope of work are not severable, and completion of all of them is material to this financial
incentive. Another material aspect of this financial incentive is that the recipient shall be a California-headquartered company for the entire term of the financial incentive and an additional 10 years. Thus, the commission, without limiting its other remedies, is entitled to repayment of all funds paid to recipient if the recipient does not timely complete all tasks in the scope of work or is not a California-headquartered company at any time during the financial incentive period and an additional 10 years.”
(B)CA Public Resources Code § 25625.2(B) If both the repayment term described in subparagraph (A) and the repayment term in paragraph (4) apply, the repayment term of paragraph (4) has priority, but the repayment term of subparagraph (A) also applies.
(C)CA Public Resources Code § 25625.2(C) The commission may exempt projects from the repayment term described in subparagraph (A) if it is prohibited by a
recipient’s existing or announced federal award.
(13)CA Public Resources Code § 25625.2(13) Include a term requiring all funds awarded in the financial incentive to be spent on projects located in California.
Climate Innovation Program financial incentives greenhouse gas reduction resilience to climate change California-headquartered companies technology advancements state climate goals out-of-state relocation California public universities reporting job creation environmental benefits competitive award process repayment conditions lithium extraction exemption California-based projects
Section § 25625.3
This law allows the commission to offer financial incentives to businesses that are not currently based in California. However, to receive these benefits, the companies must agree to move their headquarters to California before getting the incentive.
The commission may propose contingent financial incentives under the Climate Innovation Program to corporations or other business forms organized for the transaction of business that are not California-headquartered companies contingent upon a requirement that the entity become a California-headquartered company before the commission executes the financial incentive.
Climate Innovation Program financial incentives California headquarters business relocation incentive conditions corporate headquarters commission proposal non-California companies business incentives economic development California-based companies contingent incentives business forms corporate relocation incentive execution
Section § 25625.4
If a company receives a financial incentive under this law, it must keep its headquarters in California during the entire incentive period and for ten years after the incentive ends.
Recipients of a financial incentive awarded pursuant to this chapter shall be a California-headquartered company for the entire term of the financial incentive and for 10 years after the financial incentive ends.
financial incentive California-headquartered company incentive term 10 years requirement recipients company obligations headquarters location business incentives corporate compliance California business requirements
Section § 25625.5
This law allows the commission to hire experts or services without competition to help run the Climate Innovation Program or assist with project applications. They can use contracts or agreements to get help with technical, scientific, or administrative tasks.
Up to 10% of the program's budget can go toward these administrative costs.
To support the activities of this chapter, the commission may noncompetitively obtain assistance for technical, scientific, or administrative services or expertise, including, but not limited to, through contract or interagency agreement, to help with the commission’s implementation of the Climate Innovation Program or to provide assistance to project applicants for technical, scientific, or administrative services or expertise. Up to 10 percent of programs funds shall be used for this administrative purpose.
Climate Innovation Program technical assistance scientific expertise administrative services noncompetitive contracts interagency agreement project applicants program funds administrative purpose expert assistance budget allocation commission implementation support activities
