BILL ANALYSIS Ó SENATE COMMITTEE ON AGRICULTURE Senator Cathleen Galgiani, Chair 2015 - 2016 Regular Bill No: AB 761 Hearing Date: 6/30/15 ----------------------------------------------------------------- |Author: |Levine | |-----------+-----------------------------------------------------| |Version: |6/2/15 Amended | ----------------------------------------------------------------- ---------------------------------------------------------------- |Urgency: |No | Fiscal: |Yes | ---------------------------------------------------------------- ----------------------------------------------------------------- |Consultant:|Anne Megaro | | | | ----------------------------------------------------------------- Subject: Carbon sequestration: working lands. SUMMARY : This bill would define "carbon farming" and "working lands" and would require the California Department of Food and Agriculture to establish, should moneys be appropriated, a grant program to fund projects on working lands that increase carbon sequestration and greenhouse gas emissions reductions. BACKGROUND AND EXISTING LAW : The Cannella Environmental Farming Act of 1995 requires the California Department of Food and Agriculture (CDFA) to establish and oversee an environmental farming program that provides incentives to farmers whose practices promote the well-being of ecosystems, air quality, and wildlife and their habitat. The act also created the Scientific Advisory Panel on Environmental Farming (Science Panel) to, among other responsibilities, advise and assist government agencies on these issues by conducting scientific data reviews and approving and recommending scientifically valid data. In addition, the Science Panel is authorized to research, review, and comment on data used as the basis for proposed environmental policies and regulatory programs so that agricultural activities are accurately portrayed. The panel also identifies incentives to encourage agricultural practices with environmental benefits. The Strategic Growth Council was created in 2008 as a cabinet-level committee tasked with coordinating the activities of member state agencies to improve air and water quality, protect natural resources and agricultural lands, increase the AB 761 (Levine) Page 2 of ? availability of affordable housing, promote public health, improve transportation, encourage greater infill and compact development, revitalize community and urban centers, and assist state and local entities in the planning of sustainable communities and meeting AB 32 goals. Strategic Growth Council members include representatives from the Business, Consumer Services and Housing, Natural Resources, Health and Human Services, and Environmental Protection agencies; the departments of Transportation and Food and Agriculture; the Governor's Office of Planning and Research; and three public members. The Affordable Housing and Sustainable Communities Program (AHSC), administered by the Strategic Growth Council, was created in 2014 to reduce greenhouse gas (GHG) emissions through projects that implement land use, housing, transportation, and agricultural land preservation practices. The AHSC program receives 20% of the annual proceeds from the Greenhouse Gas Reduction Fund to achieve these goals (SB 862 of 2014; Health and Safety Code § 39719). The Sustainable Agricultural Lands Conservation Program (SALC) is one component of the AHSC and is implemented by the California Department of Conservation (DOC). The Strategic Growth Council is responsible for overseeing SALC and coordinating DOC with other agencies to develop program guidelines. Guidelines for the SALC program were approved by the Strategic Growth Council on January 20, 2015, and include three major elements: 1) sustainable agricultural land strategy plans, which would provide grants to develop local strategies to ensure long-term protection of highly productive and critically threatened agricultural land; 2) agricultural conservation easements; and 3) financial incentives for adoption and use of land management practices. The guidelines specifically state that the third element is not included in the 2014 request for grant applications but will be addressed in future years. COMET-FarmTM is an online USDA-Natural Resources Conservation Service tool developed in partnership with Colorado State University. COMET-farmTM, shorthand for "CarbOn Management & Emissions Tool," was created to estimate carbon sequestration and GHG emissions on individual farms based on various factors such as soil characteristics, crop production, nutrient management, water use, and tillage practices. This tool would help farmers and ranchers calculate their farm's potential for AB 761 (Levine) Page 3 of ? storing carbon in agricultural soils and reducing GHG emissions given specific land management and conservation practices. Existing law: 1) Establishes the California Farmland Conservancy Program Act, previously known as the Agricultural Land Stewardship Program Act of 1995, to encourage voluntary, long-term private stewardship of agricultural lands by offering landowners financial incentives (Public Resources Code § 10200 et seq.). 2) Establishes the California Farmland Conservancy Program Fund for monies sourced from grants, gifts, and donations, to be used for the purchase of agricultural conservation easements, fee title acquisition grants, land improvement and planning grants, technical assistance, technology transfer, and administrative costs. 3) Requires the Department of Conservation to administer this program and review grant applications for the acquisition of agricultural conservation easements or fee title for agricultural lands. 4) Requires the CDFA, through the Cannella Environmental Farming Act of 1995, to establish and oversee an environmental farming program that provides incentives to farmers whose practices promote the well-being of ecosystems, air quality, and wildlife and their habitat. 5) Establishes the Scientific Advisory Panel on Environmental Farming (Science Panel) to, among other responsibilities, advise and assist government agencies on the above issues by conducting scientific data reviews and approving and recommending scientifically valid data. 6) Establishes in 2008 the Strategic Growth Council as a cabinet-level committee tasked with coordinating the activities of member state agencies to, among other things, improve air and water quality, protect natural resources and agricultural lands, and assist state and local entities in the planning of sustainable communities and meeting AB 32 goals. 7) Requires the state Air Resources Board (ARB), through AB 761 (Levine) Page 4 of ? the California Global Warming Solutions Act of 2006, to monitor and regulate sources of greenhouse gas emissions that cause global warming in order to reduce emissions of greenhouse gases. Requires ARB to determine the 1990 statewide level of GHG emissions, approve a GHG emissions limit that is equivalent to that level to be achieved by 2020, and adopt rules and regulations regarding GHG emissions reductions (AB 32 of 2006; Health and Safety Code § 38500 et seq.). 8) Authorizes ARB to utilize market-based compliance mechanisms to regulate entities subject to GHG emission limits. 9) Creates the Greenhouse Gas Reduction Fund (GGRF) to collect all monies, except for fines and penalties, from the auction or sale of GHG allowances established by the ARB market-based compliance mechanism and authorizes the legislature to appropriate monies from this fund (Government Code § 16428.8). 10) Requires that the GGRF only be used to facilitate the achievement of reductions of GHG emissions in California, as specified (Health and Safety Code § 39710 et seq.). PROPOSED LAW : This bill: 1) States findings and declarations in regards to soil and vegetation management to enhance soil carbon sequestration. 2) Defines "carbon farming" to mean implementing a land management strategy for the purposes of reducing, sequestering, and mitigating GHG emissions on working lands. 3) Defines "working lands" to mean privately owned agricultural lands, ranches, and rangelands. 4) Requires CDFA, should funds be made available, to establish a grant program to fund projects on working lands that increase carbon sequestration and reduce GHG emissions. AB 761 (Levine) Page 5 of ? 5) Requires CDFA to prioritize funding for projects that provide the greatest benefit, including carbon farming and related co-benefits such as reduced irrigation demand, increased yield and resiliency, enhanced habitat and biodiversity, reduced water quality impacts, enhanced soil structure, and increased soil water-holding capacity. 6) Requires CDFA, in consultation with the Department of Conservation, the Department of Resources Recycling and Recovery, the state Air Resources Board, and the Department of Water Resources, to develop and adopt project solicitation and evaluation guidelines. 7) Requires CDFA to quantify the benefits of each project funded and to post this information on the department's website. ARGUMENTS IN SUPPORT: According to those in support, "Carbon farming practices include compost application, riparian restoration, no-till farming, and planting windbreaks to reduce soil moisture loss, all of which help to create long-term carbon sequestration in soils and plant matter. Through carbon farming, agricultural lands and rangelands can improve carbon capture and sequestration while creating additional water, habitat, and economic viability benefits for farmers and working land managers." According to the California Cattlemen's Association, "AB 761 will promote further research to determine what management practices are most effective in sequestering carbon and determine what practices are most feasible and cost effective to implement. The ongoing demand for carbon credits in both the regulatory and voluntary arena drives the need to develop more specific data relative to agriculture's role in carbon sequestration." COMMENTS : Agriculture and Climate Change. Farmers and ranchers are uniquely sensitive to the effects of climate change as agriculture is largely dependent upon weather and the availability of natural resources. For example, the current multi-year drought has caused many farmers to fallow fields, sell livestock due to lack of available grazing, and lay off AB 761 (Levine) Page 6 of ? employees due to reduced workload and productivity. The potential for agriculture to contribute to the mitigation of climate change by sequestering carbon and reducing GHG emissions is not fully realized or utilized. Plants absorb CO2 from the atmosphere and use it to grow, produce fruits and vegetables, and to also store carbon in the soil. Animals produce manure that could be used to create energy (through methane digesters), compost, and several other valuable products, while reducing the emission of methane and other GHG. Land management practices, such as drip irrigation, reduced land tilling, nitrogen management, and the use of cover crops, have been and are continuing to be adopted to reduce negative effects on the environment. Healthy Soils Initiative. In his 2015-16 budget proposal, Governor Brown included a new "Healthy Soils Initiative" to increase carbon in soil to improve soil health, agricultural productivity, soil water-holding capacity, and decreased sediment erosion. Governor Brown directed CDFA, under its existing authority provided by the Cannella Environmental Farming Act, to coordinate with other key agencies to work on several new initiatives. CDFA has since developed five action measures: protect and restore soil carbon; identify funding opportunities, including market development; provide research, education and technical support; increase governmental efficiencies to enhance soil health on public and private lands; and ensure interagency coordination and collaboration. Marin Carbon Project. The Marin Carbon Project was designed to demonstrate on-farm practices that enhance carbon sequestration, land productivity, ecosystem functions, and mitigate climate change. One component of this project was published in 2013 by R. Ryals and W.L. Silver in Ecological Applications. This study applied 1.3 cm ( inch) of compost on grasslands in Marin County and measured carbon storage in soils over a three-year period. The authors concluded that a single application of compost resulted in greater carbon storage over time. AB 761 would fund projects that demonstrate carbon farming and sequestration; however, the use of compost is just one of several methods to achieve these goals. Others include the use of biochar, cover crops, windbreaks, irrigation practices, and reduced land tilling. SB 367(Wolk). This bill is similar to SB 367, currently in the AB 761 (Levine) Page 7 of ? Assembly Agriculture Committee, in that it would create a grant program established by CDFA to fund on-farm projects that increase soil carbon sequestration and reduce GHG emissions. AB 761 would expand upon the component of SB 367 regarding on-farm projects that demonstrate soil-building and carbon-sequestration practices. Should these bills move forward, the respective authors may wish to harmonize these bills to ensure that they are not in conflict, for example, using similar terminology, definitions, and adjacent code sections. Double-referral. The Senate Rules Committee has double referred this bill to the Senate Committee on Environmental Quality as the second committee of referral. Therefore, if this measure is approved by this committee, the motion should include an action to re-refer the bill to the Senate Committee on Environmental Quality. RELATED LEGISLATION : SB 367 (Wolk) of 2015, currently in the Assembly Agriculture Committee, would recast and expand the membership and the duties of CDFA's Science Advisory Panel on Environmental Farming; would appropriate $25 million from the Greenhouse Gas Reduction Fund to CDFA for the establishment of a new grant program to support on-farm practices that reduce GHG emissions and increase carbon storage in soil; and would appropriate 2% of the proceeds from this fund to the Sustainable Agricultural Lands Conservation Program for these activities. AB 1826 (Chesbro), Chapter 727, Statutes of 2014. Requires businesses that generate a specified amount of organic waste per week to arrange for recycling services. SB 862 (Committee on Budget and Fiscal Review), Chapter 36, Statutes of 2014. Among other provisions, establishes the Affordable Housing and Sustainable Communities Program, administered by the Strategic Growth Council, to reduce GHG emissions through projects that implement land use, housing, transportation, and agricultural land preservation practices. SB 732 (Steinberg), Chapter 729, Statutes of 2008. Establishes the Strategic Growth Council to coordinate member state agencies implementing projects to meet the goals of the California Global Warming Solutions Act of 2006. AB 761 (Levine) Page 8 of ? AB 32 (Nunez/Pavley et al.), Chapter 488, Statutes of 2006. Establishes the California Global Warming Solutions Act of 2006. Requires ARB to monitor and regulate sources of GHG emissions that cause global warming in order to reduce emissions of GHG, as specified. PRIOR ACTIONS : ------------------------------------------------------------------ |Assembly Floor: |67 - 11 | |--------------------------------------+---------------------------| |Assembly Appropriations Committee: |13 - 0 | |--------------------------------------+---------------------------| |Assembly Natural Resources Committee: |8 - 1 | | | | ------------------------------------------------------------------ SUPPORT : Audubon California Big Sur Land Trust California Cattlemen's Association California Compost Coalition California Farm Bureau Federation California League of Conservation Voters California State Grange The California Rangeland Trust California Trout Californians Against Waste Carbon Cycle Institute City and County of San Francisco Clean Water Action Environmental Action Committee of West Marin Land Trust of Santa Cruz County Peninsula Open Space Trust Planning and Conservation League Recology Santa Clara Valley Open Space Authority OPPOSITION : None received -- END -- AB 761 (Levine) Page 9 of ?