BILL ANALYSIS Ó AB 2174 Page 1 Date of Hearing: May 25, 2012 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 2174 (Alejo) - As Amended: May 14, 2012 Policy Committee: AgricultureVote:7 - 0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill requires the secretary of the California Department of Food and Agriculture (CDFA) to use funding from the Fertilizer Research and Education Program (FREP) to develop programs in the following areas: 1)Education focused on a more efficient and sound use of fertilizer, in order to minimize the environmental impact of fertilizer. 2)Research to improve nutrient management practices, which would result in minimizing the environmental aspects of fertilizer. 3)Technical assistance focused on a more efficient and sound use of fertilizer. FISCAL EFFECT 1)Providing the education, research and technical assistance specified in this legislation would require about $350,000 of the $1 million spent annually by CDFA for current FREP projects, if the funding is not already allocated to multi-year projects. 2)Alternatively, the secretary may determine that rather than shifting existing funding to this new activity, this bill may require an increase in the assessment on fertilizer licensees. Currently, the mil assessment is at mil ($0.0005) per every dollar of sales, resulting in $1 million in funding for FREP. Current law gives the secretary the authority to increase the assessment to 1 mil ($0.001) per dollar of sales. AB 2174 Page 2 COMMENTS 1)Purpose . This bill is in response to a March 2012 report from the University of California at Davis' Center for Watershed Sciences that detailed nitrate contamination in groundwater in the state's two leading agricultural regions (Tulare Lake Basin and the Salinas Valley). The report found for a quarter million people that contamination is currently threatening drinking water safety, with millions more Californians to be affected in the future. The report found that agricultural activities are responsible for 96% of the pollution, with chemical fertilizer making up 54% of the sources. This bill would use FREP funding for implementation projects to assist farmers and ranchers with best management practices for fertilizer use. The author notes that giving technical assistance to agricultural producers would lead to more efficient application of fertilizers, resulting in savings to farmers, who would use less fertilizer, resulting in less contamination of the state's water shed. 2)Support . The Ecological Farming Association contends this bill is necessary because it focuses declining technical assistance resources on the critical area of nutrient management planning and related fertilizer use efficiency practices, which may help reduce the amount of nitrate run-off in the state's groundwater. This support is echoed by various California farmers, including Full Belly Farms, Bolthouse Farms, and Dixon Ridge Farms. 3)Background . FREP was established in 1990 when California Food and Agricultural Code Section 14611(b) authorized a mil assessment on the sale of fertilizing materials, "to provide funding for research and education regarding the use and handling of commercial and organic fertilizers, including, but not limited to, any environmental effects." The mil assessment currently generates close to $1 million per year for fertilizer research. Since 1990, FREP's focus has expanded to include research on many of California's important and environmentally sensitive cropping systems, including almonds, tomatoes, cotton, citrus, AB 2174 Page 3 wine grapes, horticulture, lettuce, and other cool-season vegetables. To date, 40% of FREP's projects have been related to developing, testing, and demonstrating various nutrient tissue and/or soil testing procedures. According to CDFA's FREP facts sheet posted to their web site, over 20 years of FREP research projects have focused on agronomic efficiency in the management of nutrients, precision irrigation and fertilization trough irrigation practices, and soil and fertilizer interaction. 2012 priorities include: Comparisons of economically viable and commercially ready, integrated fertility-water-soil management approaches that preserve soil and water quality. Nutrient requirements for high-value specialty crops or emerging new crops in highly environmentally sensitive areas. Devising innovative techniques to improve fertilizer use efficiency. Over this period of time, FREP has provided $12 million in funding for 160 technical, research, and education projects. Analysis Prepared by : Julie Salley-Gray / APPR. / (916) 319-2081