(The Center Square) – The California High-Speed Rail could receive more than $500 million in the state’s cap-and-trade money if a new bill introduced in the legislature this year passes into law.
The bill, Senate Bill 1411, authored by Sen. Howard Stern, D-Los Angeles, proposes to allow the High-Speed Rail Authority to use more than $500 million from the state’s cap-and-trade program for the Merced to Bakersfield section of the high-speed rail. The state’s cap-and-trade program is often called cap-and-invest.
The U.S. Department of Transportation estimates that the San Francisco to Los Angeles segment of the high-speed rail project is projected to cost $106 billion. California voters approved $9.95 billion in bond money in 2008 to finance the San Francisco to Los Angeles segment. The Hoover Institution reports that the project was supposed to be done in 2020.
According to a fact sheet on the state’s cap-and-trade program compiled by researchers at University of California, Berkeley, cap-and-trade establishes a cap on greenhouse gas emissions and makes companies that go over that cap purchase credits, or allowances, equal to that company’s emissions levels that year. Electricity generation, manufacturing and fuel refining are all activities that can make a company emit more greenhouse gas emissions than the cap established by the program.
The cap-and-trade program was established in 2014 and since then has generated roughly $33 billion from some of the state’s biggest polluters, according to Governor Gavin Newsom’s office.
“This is about ensuring the High-Speed Rail Authority has all the tools it needs to meet its long-term goal of developing a statewide network that extends well beyond Merced to Bakersfield,” Sen. Ben Allen, D-El Segundo, testified on Stern’s behalf during a bill hearing on Wednesday morning. “The bill removes the $500 million project cap, sending a big market signal and giving flexibility to the authority to attract that capital from partners to seriously discuss and develop transit projects that create jobs and advance our high-speed rail goals.”
Previous law kept the High-Speed Rail Authority from utilizing more than $500 million in cap-and-trade funds to pay for the Merced to Bakersfield segment of the high-speed rail, according to a legislative analysis of the bill. The money would be allowed to pay for “early work” projects on that segment, including identifying and relocating utilities, identifying and acquiring parcels of land in the high-speed rail’s right-of-way and other work on the project.
Stern testified in the Senate Environmental Quality Committee hearing Wednesday that his district and other communities in and around Los Angeles want to see the high-speed rail finished, and not just in the middle of the state.
“When you look at Southern California, the power of rail from even above my district up into Camarillo and all the way to Santa Barbara down to San Diego, there are a lot of people who want to get on the train,” Stern, the bill’s author, testified in the bill hearing on Wednesday. “We’ve got to treat this high-speed rail not so much as a burden on taxpayers anymore, but as a financial opportunity.”
At the end of the bill hearing on Wednesday, there were not enough members of the Senate Environmental Quality Committee to constitute a quorum, which is required to pass bills out of the committee and onto appropriations. Multiple other bills scheduled for bill hearings in that committee on Wednesday morning had to be held until senators on that committee showed up to vote on several different bills.
No one testified against the bill during the committee meeting on Wednesday, although the City of Merced and the Merced County Association of Governments both registered their opposition to the bill, according to the bill analysis.
The City of Merced’s public information officer did not respond to The Center Square before press time on Wednesday. Officials with The Merced County Association of Governments who could answer questions about the association’s opposition to the bill said they were not available for an interview, but sent an email on Wednesday afternoon saying the association’s position on the bill had changed.
“MCAG [Merced County Association of Governments] is currently reevaluating its position on SB 1411 in light of the recent amendments. We appreciate the author’s efforts to respond to stakeholder concerns and refine the measure,” Stacie Guzman, executive director of the Merced County Association of Governments, wrote to The Center Square via email. “As we continue our review, MCAG remains focused on a core principle: ensuring that the limited high-speed rail resources are prioritized to deliver a fully functional and operable initial operating segment in the San Joaquin Valley from Merced to Bakersfield.”
Gov. Gavin Newsom, who has supported the continued construction on the state’s high-speed rail project, allocated $1 billion to the High-Speed Rail Authority last year in his 2025-26 budget proposal. In his 2026-27 budget proposal released in January, Newsom allocated $1 billion again for the High-Speed Rail Authority.
The efforts from California lawmakers to find money to pay for the high-speed rail project follow the California Attorney General’s dismissal of a lawsuit against the Federal Railroad Administration over the feds’ decision to cut $4 billion of grant money that previously went to the high-speed rail. The pull of those federal grants in July 2025 prompted the lawsuit, which was dismissed in December 2025.
Before the federal pullback of grant money to help pay for the high-speed rail project, California received $6.8 billion in federal taxpayer dollars for the high-speed rail, and is expected to cost between $89 billion and $128 billion, according to a 2024 draft business plan from the High-Speed Rail Authority.
