California Senate Bill 535 is a California bill that was introduced by Senator Kevin De Leon of Los Angeles and signed into law on September 30, 2012 by Governor Jerry Brown. SB 535 is largely based on the actions introduced by Global Warming Solutions Act of 2006, commonly known as AB 32. AB 32 was passed in 2006 and its goal is to reduce greenhouse gas emissions in California. The process outlined by AB 32 resulted in the creation of a cap-and-trade system in California. Companies must purchase extra credits when they exceed their allotted amount for the cap and trade. Each year, the money generated from companies purchasing extra credits is expected to generate about $1 billion of state revenue. SB 535 requires that 25% of the fund is spent on projects that benefit disadvantaged communi