BILL ANALYSIS Ó AB 761 Page 1 Date of Hearing: April 13, 2015 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Das Williams, Chair AB 761 (Levine) - As Introduced February 25, 2015 SUBJECT: Carbon farm planning SUMMARY: Declares that $50 million shall be available, upon appropriation, to the Department of Conservation (DOC) to establish a grant program to fund projects that increase carbon sequestration in agricultural lands, ranches, and rangelands. EXISTING LAW: 1)Creates the Division of Resource Conservation (Division) within DOC and imposes powers and duties on the Division with regard to resource conservation. Allows the Division to aid Resource Conservation Districts in developing plans for achieving their soil and water conservation objectives. 2)Requires, pursuant to the California Global Warming Solutions Act (AB 32), the Air Resources Board (ARB) to adopt a statewide greenhouse gas (GHG) emissions limit equivalent to 1990 levels by 2020 and to adopt rules and regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions. AB 761 Page 2 3)Requires the Strategic Growth Council (SGC) to develop and administer the Affordable Housing and Sustainable Communities Program to reduce GHG emissions through projects that implement land use, housing, transportation, and agricultural land preservation practices to support infill and compact development and that support other related and coordinated public policy objectives. 4)Continuously appropriates to the SGC 20% of the annual proceeds of the Greenhouse Gas Reduction Fund (GGRF). 5)Phases in requirements for generators of specified amounts of organic waste to arrange recycling services for the organic waste material beginning January 1, 2016. THIS BILL: 1)Defines "carbon farm planning" as a landscape-level conservation planning process designed to identify GHG capture and mitigation opportunities on working lands and prescribes how to quantify those GHG benefits. 2)Declares that $50 million shall be available, upon appropriation, to the DOC to establish a grant program to fund projects that increase carbon sequestration on agricultural lands, ranches, and rangelands. 3)Requires DOC in coordination with the Department of Resources, Recycling and Recovery (CalRecycle) and the Department of Water Resources (DWR) to develop and adopt project solicitation and evaluation guidelines for the grant program. AB 761 Page 3 4)Requires projects to meet one or more of 10 conditions to be eligible for the grant program. Some of the conditions include projects that assist in the state meeting GHG goals, improve soil water retention, and improve the economic and ecological viability of working lands. FISCAL EFFECT: At least $50 million from an unspecified source. COMMENTS: 1)Author's statement. AB 761 establishes a $50 million carbon farming grant program to fund 15-20 pilot projects to expand the use of sustainable agricultural practices, including compost application, on rangelands and other agricultural lands. Research shows that these pilots are expected to increase soil carbon sequestration (reduce greenhouse gasses), improve soil water retention, and make agricultural land more resilient to climate change and drought. 2)Is this just about compost? The Marin Carbon Project began as a compost experiment seven years ago on a Marin County ranch. This experiment uncovered a way to remove carbon dioxide from the air through application of compost on rangeland soil. The project hopes to turn the rangelands of California into a tool to meet the state's GHG reduction goals. These experiments on the grazing lands in Marin County and the Sierra foothills of Yuba County by UC Berkeley bio-geochemist Whendee Silver showed that a one-time application of compost substantially boosted the soil's carbon storage. The effect has persisted over six AB 761 Page 4 years, and Silver believes the carbon will remain stored for at least several decades. Last year, the Governor signed AB 1826 (Chesbro), Chapter 727, Statutes of 2014, which required generators of specified amounts of organic waste to arrange recycling services for the organic waste material. As the state diverts more organic waste from landfills, much of the organic waste could be turned into compost. The Marin Carbon Project with the help of UC Berkeley has demonstrated the benefits of compost application on rangelands. Compost can also be used on croplands and home gardens. The state has a role in developing markets for compost and collecting data on the benefits of it uses. The Governor's 2015-16 budget proposal unveiled a "Healthy Soils" initiative. The proposal stated that: ?as the leading agricultural state in the nation, it is important for California's soils to be sustainable and resilient to climate change. Increased carbon in soils is responsible for numerous benefits including increased water holding capacity, increased crop yields and decreased sediment erosion. In the upcoming year, the Administration will work on several new initiatives to increase carbon in soil and establish long term goals for carbon levels in all California's agricultural soils. CDFA will coordinate this initiative under its existing authority provided by the Environmental Farming Act. AB 761 creates a grant program that will fund projects that increase carbon in soils through compost application, yet the supporters have identified other practices that they wish be included in the grant program. These practices include tillage management, nutrient management, windbreaks, AB 761 Page 5 specific plantings, habitat enhancement, and other improved management practices, which they believe will increase carbon sequestration and reduce GHG emissions. Therefore, the grant program created by this bill will look for projects on working lands that help the state meet its GHG emission goals, but those projects will not be limited to compost application and will not be limited to rangelands. 3)Working lands. According to ARB's May 2014 "First Update to the Climate Change Scoping Plan" (scoping plan update), "recent research has shown that GHG emissions from urban areas are much greater than those from agricultural lands on a per-acre basis." Also according to the scoping plan update there are many GHG emission reduction and carbon sequestration opportunities that could be realized in the agriculture sector. The scoping plan update stated that restoration and improved management practices on rangelands that increase carbon storage should be incentivized. In the scoping plan update, ARB combines rangelands with forestland and calls them working lands. ARB categorizes all other agricultural practices in a section on agriculture. AB 761, for purposes of the grant program, combines rangeland and other agricultural land together as working lands. This might be more appropriate than separating one agricultural practice from all others. The grant program would develop incentives to increase carbon sequestration and reduce GHG emissions for all different types of crop and livestock production and could help create comparisons across the industry. 4)Carbon farm planning. The bill defines carbon farm planning as a planning process that identifies GHG capture and mitigation opportunities on working lands and quantifies those benefits using the United States Department of Agriculture's (USDA) COMET-Planner, COMET-Farm, and other quantification AB 761 Page 6 tools. These quantification tools were designed by the USDA in partnership with Colorado State University to help enable agricultural producers to calculate how much carbon their conservation actions can remove from the atmosphere. COMET-Planner and COMET-Farm are new tools and are currently for voluntary reductions. It is unclear whether they will mesh with how ARB will quantify reductions from carbon farm planning. Information provided by the author states that carbon farming improves carbon sequestration on agricultural and rangelands while creating additional water, habitat, and economic viability benefits for farmers and working land managers. According to the author, many carbon farming practices are not new, but if applied appropriately on rangelands and croplands can significantly enhance carbon sequestration in both vegetation and soils. After the initial title and definition, AB 761 only uses the term carbon farm planning again once in condition 9 of the 10 possible ways projects may qualify for grants. However, condition 9 allows for similar planning processes that are not carbon farm planning. While carbon farm planning is an interesting concept, as currently drafted, it seems to serve no real purpose for the bill. It might be more appropriate to make the bill focused on GHG emission reductions and carbon sequestration on working lands while prioritizing the demonstration of carbon farm planning. The author and Committee may wish to consider amending the bill to name the Division Carbon Sequestration on Working Lands and prioritize carbon farm planning for awarding project grants. 5)Department of Conservation. DOC has received funding from SGC to administer the Sustainable Agricultural Lands Conservation program, which protects agricultural land with easements, and received funding from SGC to develop a program to assist with management of agricultural land in ways to assist California with meeting its GHG reduction goals. However, the author does not believe DOC is the most appropriate agency to administer AB 761 Page 7 this grant program. The author believes the California Department of Food and Agriculture (CDFA) would be the more appropriate agency to administer this grant program. CDFA has a single focus on working lands and is a member of the Climate Action Team. If CDFA was the lead agency, AB 761 would be consistent with recommendations in the scoping plan update which stated, "CDFA will strengthen technical assistance programs and associated financial incentives to help agricultural operators develop carbon plans and implement GHG emission reduction practices." The author and Committee may wish to consider amending the bill to make CDFA the agency with the lead role administering the grant program while consulting with ARB, CalRecycle, DOC, and DWR. 6)Suggested Amendments. In addition to the other amendments suggested above the author and committee may wish consider amending the bill to: a) Require each project to be on working lands and assist the state in meeting its GHG emission reduction goals. b) Require CDFA to prioritize projects with the greatest level of benefits. c) Reduce the number of benefits and changes the benefits to more closely align with the intent of the bill. d) Require CDFA to quantify the benefits of each project awarded through the grant program and post the information on their website. 7)Opposition. The Center for Biological Diversity opposes AB 761 because it believes the bill assumes that livestock AB 761 Page 8 rangelands are the best possible end use of compost and would directly fund only livestock rangelands. However, the definition of working lands includes all privately owned agricultural lands. In addition, the committee amendments will broaden the type of projects eligible beyond compost and rangelands. REGISTERED SUPPORT / OPPOSITION: Support Audubon California California Cattlemen's Association California Trout Carbon Cycle Institute Environmental Action Committee of West Marin Land Trust of Santa Cruz County Peninsula Open Space Trust Santa Clara Valley Open Space Authority AB 761 Page 9 Opposition Center for Biological Diversity (unless amended) Analysis Prepared by:Michael Jarred / NAT. RES. / (916) 319-2092