BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 455
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          SENATE THIRD READING
          SB 455 (Pavley)
          As Amended  August 13, 2012
          Majority vote 

           SENATE VOTE  :21-3  
           
           NATURAL RESOURCES   6-3         APPROPRIATIONS      10-5        
           
           ----------------------------------------------------------------- 
          |Ayes:|Chesbro, Brownley,        |Ayes:|Gatto, Blumenfield,       |
          |     |Dickinson, Huffman,       |     |Bradford,                 |
          |     |Monning, Skinner          |     |Charles Calderon, Campos, |
          |     |                          |     |Davis, Hill, Cedillo,     |
          |     |                          |     |Mitchell, Solorio         |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Knight, Grove, Halderman  |Nays:|Harkey, Donnelly,         |
          |     |                          |     |Nielsen, Norby, Wagner    |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY :  Requires all mitigation associated with timberland 
          conversion projects, including greenhouse gas (GHG) mitigation, 
          to be on lands that secure the mitigation with a permanent 
          conservation easement and include, at a minimum, the 
          reforestation of a previously forested area.  Specifically,  this 
          bill:
           
          1)Prohibits the approval of an application for conversion of 
            timberlands of three or more acres unless the Department of 
            Forestry and Fire Protection (CAL FIRE) finds all of the 
            following:

             a)   All of the environmental impacts of the conversion, 
               including impacts on wildlife, habitat values, and forest 
               type are fully mitigated.  This determination must be 
               approved by the Department of Fish and Game (DFG).

             b)   The mitigation occurs on California timberlands and 
               complies with the state's GHG reduction principles, which 
               generally require that 1) GHG reductions achieved are real, 
               permanent, quantifiable, verifiable, and enforceable by ARB 
               and 2) the reduction is in addition to any GHG reduction 
               otherwise required by law or regulation, and any other GHG 








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               reduction that otherwise would occur.

             c)   The mitigation fully mitigates the loss of carbon in 
               above-ground and below-ground biomass and the loss of 
               future ongoing carbon sequestration. The reduction of GHG 
               impacts must occur over the same time period, and be 
               equivalent to, the GHG emission losses that result from the 
               conversion.

          2)Requires all mitigation associated with conversion projects to 
            be on lands that secure the mitigation with a permanent 
            conservation easement and include the reforestation of a 
            previously forested area at a minimum acreage ratio of 
            one-to-one.  To the extent the reforestation activity does not 
            fully mitigate the impacts of the conversion project, the 
            applicant is required to undertake additional actions as 
            specified.

          3)Requires the mitigation to be completed within two years of 
            the conversion.  The permit applicant may undertake the 
            mitigation directly, through agreements with the state, or 
            with third parties as specified.

          4)Exempts conversions that comply with the Z'berg-Nejedly Forest 
            Practice Act's (FPA) exemption for conversion involving less 
            than three acres. 

          5)Requires CAL FIRE to develop guidelines in consultation with 
            and approved by State Air Resources Board (ARB) to assist in 
            compliance with this bill.  

          6)Authorizes CAL FIRE to collect a fee for conversion permits to 
            pay for administrative costs.

          7)Creates the Timberland Conversion Services Fund for money 
            received pursuant to mitigation agreements between timberland 
            converters and the state.  

           EXISTING LAW  , pursuant to the FPA:

          1)Requires any person who intends to convert timberlands to 
            another use to file an application for conversion with the 
            Board of Forestry and Fire Protection (Board).  If the 
            timberland conversion is proposed in a timberland production 








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            zone, the application must provide specific information 
            regarding proposed alternate use.  The Board is required to 
            approve the application for conversion only if it finds that 
            1) the conversion would be in the public interest; 2) the 
            conversion would not have a substantial and unmitigated 
            adverse effect upon the continued timber-growing use or 
            open-space use of other surrounding lands zoned as timber 
            production; and, 3) the soils, slopes, and watershed 
            conditions would be suitable for the uses proposed if the 
            conversion were approved.  The existence of an opportunity for 
            an alternative use of the land or the uneconomic character of 
            the existing use shall not alone be sufficient reason for 
            conditionally approving an application for conversion. 

          2)Authorizes the Board to exempt a person from the FPA's 
            conversion requirements whose activities are limited to the 
            one-time timberland conversion of less than three acres.  A 
            person may not receive more than one exemption in a five-year 
            period.  The Board must determine that the exemption is 
            consistent with the FPA.

           FISCAL EFFECT  :  According to the Assembly Appropriations 
          Committee:

          1)One-time costs to CAL FIRE and ARB, likely in the hundreds of 
            thousands of dollars, to develop timberland conversion 
            guidelines (special funds, reimbursed from revenue in the 
            Timberland Conversion Services Fund).

          2)Annual costs of an unknown amount, but potentially in the 
            hundreds of thousands of dollars, to CAL FIRE and DFG to 
            review applications to convert three or more acres of 
            timberland to nontimber use (special funds).  These costs 
            should be fully covered by the fee authority provided to CAL 
            FIRE.

          3)Annual minor costs, no more than the low tens of thousands of 
            dollars, to the Natural Resources Agency to administer monies 
            in the Timberland Conversion Services Fund (Timberland 
            Conversion Services Fund).

           COMMENTS  :  California's forests provide a significant climate 
          service to the state, sequestering over 5 million metric tons of 
          carbon pollution annually.  There has been, however, increasing 








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          pressure for private timberland owners to find economically 
          attractive uses for their property.  Timber management has 
          become less profitable for a number of reasons and landowners 
          often see increasing opportunities to develop rural subdivisions 
          or establish vineyards.  As timberlands are converted to other 
          uses, much of the carbon stored in these forests is emitted to 
          the atmosphere and the ongoing carbon sequestration benefits, as 
          well as many other benefits (e.g. water quality protection, 
          habitat, timber resources) are diminished, if not entirely lost. 
           From 1997 to 2012, 14,654 acres of timberlands in the state 
          were converted to alternate uses.  Nevada, Placer, Plumas, 
          Siskiyou, and Mendocino Counties have been affected the most, 
          with 2,564, 2,309, 2,274, 1,644, and 1,013 acres converted, 
          respectively.

          According to the author, "there is no explicit provision in the 
          CEQA guidelines for mitigation of carbon emissions or lost 
          carbon sequestration potential from conversions of timberland to 
          non-timberland uses?This bill would clarify that the conversion 
          of projects larger than 3 acres must mitigate all of its 
          impacts."

          Additionally, according to the cosponsors (The Nature 
          Conservancy and The Pacific Forest Trust), this bill "provides 
          an incentive to timberland owners to mitigate the impacts of 
          conversion that does occur by creating a funding stream to pay 
          landowners to provide mitigation through activities such as 
          reforestation, changes in management and conservation. These 
          complementary actions will help California maintain its valuable 
          timberland, their public benefits and the jobs that depend on 
          these resources." 

           SB 466 (Steinberg) of 2007, which was held in the Senate 
          Appropriations Committee, was introduced to impose, among other 
          things, a menu of mitigation options on forestland conversions 
          with the mitigation lands being managed pursuant to the Forestry 
          Protocols of the Climate Action Registry.  


           Analysis Prepared by  :    Mario DeBernardo / NAT. RES. / (916) 
          319-2092 


                                                                FN: 0005050








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