California Assembly Bill 179 is the 2022 budget trailer bill that amended the state’s Budget Act of 2022, authorizing the Middle Class Tax Refund and directing billions of dollars in appropriations across state agencies for the 2022–23 fiscal year.1California Legislative Information. AB-179 Budget Act of 2022 Rather than creating a single new program, it revised, added, and repealed line-item appropriations across dozens of departments, which is why its effects reach into so many corners of state government and continue to shape programs into 2026.
The Middle Class Tax Refund
The provision most Californians encountered directly was the Middle Class Tax Refund, a one-time inflation relief payment sent between October 2022 and early 2023 by direct deposit or prepaid debit card. What you received depended on your 2020 California adjusted gross income, your filing status, and whether you claimed a dependent.2Franchise Tax Board. Middle Class Tax Refund
For single filers:
- $75,000 or less in AGI: $350, or $700 with a dependent
- $75,001 to $125,000: $250, or $500 with a dependent
- $125,001 to $250,000: $200, or $400 with a dependent
- Over $250,000: not eligible
Joint filers had higher cutoffs, with the top eligible bracket reaching $500,000 and payments running from $400 to $1,050. Head-of-household filers fell between the single and joint schedules.2Franchise Tax Board. Middle Class Tax Refund The IRS ultimately determined the payments were not taxable on federal returns.
Climate and Zero-Emission Vehicle Funding
The largest single climate allocation went through the State Air Resources Board: $600 million from the Greenhouse Gas Reduction Fund for clean trucks, buses, and off-road equipment, administered through programs including the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project.3California Legislative Information. AB-179 Budget Act of 2022
Other transportation-related funding included $135 million for zero-emission school buses, $75 million for zero-emission drayage trucks at ports, $70 million for zero-emission transit buses, and $255 million for equity transportation programs under the Charge Ahead California Initiative. At least $125 million of that equity funding was directed to establish the Clean Cars 4 All Program statewide, with another $126 million in Greenhouse Gas Reduction Fund money going to Clean Cars 4 All and related equity programs.1California Legislative Information. AB-179 Budget Act of 2022
Beyond vehicles, $200 million went through the Climate Catalyst Revolving Loan Fund for clean energy transmission projects, $40 million for reducing emissions from commercial harbor craft, and $20 million for accelerating adoption of ultra-low-global-warming-potential refrigerants through the Equitable Building Decarbonization Program.
Health Care and Behavioral Health
Health care received some of the bill’s largest single appropriations. The Behavioral Health Continuum Infrastructure Program alone received roughly $1.16 billion to build treatment facilities and supportive housing, with funding available for encumbrance through June 2027.1California Legislative Information. AB-179 Budget Act of 2022
Other health allocations included:
- $120.5 million for wellness and resilience supports for children, youth, and parents, including school-based mental health programs
- $70 million for Medi-Cal managed care equity and practice transformation payments
- $57 million to implement the Community Assistance, Recovery, and Empowerment (CARE) Act, which created a new court process for people with severe untreated mental illness
- $20 million for the Abortion Practical Support Fund
- $10 million to backfill lost federal Title X family planning funding
- $114.4 million to forgo recoupment of overpayments from independent pharmacies
Courts and Public Safety
The judicial branch received approximately $775 million in total support. A $40 million court-based firearm relinquishment program was one of the more notable public safety investments, with $36 million going directly to courts and at least 30 percent of each court’s allocation available for contracts with local law enforcement. The Judicial Council was required to submit a report to the Legislature on program outcomes by March 2025.1California Legislative Information. AB-179 Budget Act of 2022
Related allocations included $100 million to bring trial courts to at least 84.5 percent of their workload-formula staffing needs, $70 million for pretrial services distributed by each county’s share of the 18-to-25-year-old population, $30 million for court reporters in family and civil law cases, $30 million for eviction defense and tenant assistance, $20 million for the Equal Access Fund, and $15 million for COVID-19 consumer debt legal services. Over $175 million went to courthouse construction in Santa Clarita, Quincy, Redding, Solano, Fresno, and San Luis Obispo counties.
Within corrections, the Department of Corrections and Rehabilitation received $55.6 million for the Integrated Substance Use Disorder Treatment Program, $10.6 million for the Returning Home Well reentry program, and $5 million for the California Reentry and Enrichment Grant Program.
Education, Housing, and Economic Development
Education funding under AB 179 focused heavily on student mental health. Of the $120.5 million for youth wellness, $75 million was earmarked for school-based programs teaching wellness and mindfulness to teachers and students in kindergarten through 12th grade, required to align with the community schools model.1California Legislative Information. AB-179 Budget Act of 2022 The California Community Colleges system received over $5.6 billion in appropriations, and $9.5 million went to providing books to low-income children.
Housing received $33.3 million for the Transitional Housing Program on top of the eviction defense funding routed through the courts. On the economic side, the California Competes Grant Program received $120 million, and small businesses received targeted funding including $23 million for a Technical Assistance Expansion Program and $20 million for the Inclusive Innovation Hub Program. In response to the drought, $75 million went to the Small Agricultural Business Drought Relief Grant Program.
The Lithium Extraction Excise Tax
AB 179 also created California’s first excise tax on lithium extraction, aimed at producers of lithium carbonate in the state. The tax is tiered based on the total metric tons a producer has extracted over its lifetime. The 2026 rates, which adjust periodically, are:4California Department of Tax and Fee Administration. New Lithium Extraction Excise Tax Rates Effective January 1, 2026
- 20,000 metric tons or less cumulatively: $425 per metric ton
- Over 20,000 but not over 30,000 metric tons: $638 per metric ton
- Over 30,000 metric tons: $851 per metric ton
When a mine or extraction facility changes ownership, the state treats cumulative extraction as already at 30,000 metric tons, placing the new owner in the highest bracket from day one. Revenue first covers state administrative costs; the remainder is split between Salton Sea restoration projects (including community engagement and community-benefit grants in the surrounding area) and the counties directly affected by lithium extraction.5California Department of Tax and Fee Administration. Lithium Extraction Excise Tax Guide The provision is particularly relevant to Imperial County, where geothermal lithium extraction near the Salton Sea has been expanding.
Not to Be Confused With the 2023–24 AB 179
California reuses bill numbers each session. A separate AB 179 was introduced in the 2023–2024 session dealing with state government claims processes and appeals timelines, with a claimant review program running to January 2026 and a pilot grant program extending to 2028.6California Legislative Information. California Assembly Bill 179 – State Government It is unrelated to the 2022 Budget Act version described above.