BILL ANALYSIS                                                                                                                                                                                                    Ó



           SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                            Senator Bob Wieckowski, Chair
                                2015 - 2016  Regular 

          Bill No:           SB 367           Hearing Date:    4/29/2015 
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          |Author:   |Wolk                                                  |
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          |Version:  |4/13/2015                                             |
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          |Urgency:  |No                     |Fiscal:      |Yes             |
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          |Consultant|Rebecca Newhouse                                      |
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          Subject:  Agriculture:  lands:  greenhouse gases

            ANALYSIS:                                                     
          
          Existing law:

          1. Under the California Global Warming Solutions Act of 2006  
             (also known as AB 32), requires the California Air Resources  
             Board (ARB) to determine the 1990 statewide greenhouse gas  
             (GHG) emissions level and approve a statewide GHG emissions  
             limit that is equivalent to that level, to be achieved by  
             2020, and to adopt GHG emissions reductions measures by  
             regulation.  ARB is authorized to include the use of  
             market-based mechanisms to comply with these regulations.  
             (Health and Safety Code §38500 et seq.) 

          2. Establishes the Greenhouse Gas Reduction Fund (GGRF) in the  
             State Treasury, requires all moneys, except for fines and  
             penalties, collected pursuant to a market-based mechanism be  
             deposited in the fund. (Government Code §16428.8)

          3. Prohibits the state from approving allocations for a measure  
             or program using GGRF moneys except after determining that  
             the use of those moneys furthers the regulatory purposes of  
             AB 32, and requires moneys from the GGRF be used to  
             facilitate the achievement of reductions of GHG emissions in  
             California.  (HSC §39712)

          4. Creates the Affordable Housing and Sustainable Communities  
             Program, developed and administered by the Strategic Growth  
             Council (SGC), to reduce greenhouse gas emissions through  







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             projects that implement land use, housing, transportation,  
             and agricultural land preservation practices to support  
             infill and compact development.

          5. Continuously appropriates 60% of GGRF moneys to transit,  
             affordable housing and sustainable communities, including 20%  
             continuously appropriated to the SGC for the Affordable  
             Housing and Sustainable Communities Program.  From the 20%  
             continuously appropriated for the Affordable Housing and  
             Sustainable Communities Program, 10% must be allocated to  
             affordable housing.  (HSC §39719)

          6. Under the Cannella Environmental Farming Act of 1995,  
             requires the following (Food and Agricultural Code §561 et  
             seq.):

              A.     The Department of Food and Agriculture (CDFA) to  
                 establish an environmental farming program to provide  
                 incentives to farmers whose practices promote the  
                 wellbeing of ecosystems, air quality, and wildlife and  
                 their habitat.

              B.     Requires the Secretary of CDFA to convene a  
                 five-member Scientific Advisory Panel (Panel) on  
                 Environmental Farming to advise and assist federal,  
                 state, and local government agencies on issues relating  
                 to air, water, and wildlife habitat.  

          This bill:  

          1. Specifies that the Environmental Farming Program (EFP)  
             established by the CDFA also provide low-interest loans,  
             technical assistance, educational materials and outreach, or  
             a combination of these things, to farmers whose practices  
             promote the well-being of ecosystems, air quality and  
             wildlife and their habitat, and that reduce greenhouse gas  
             emissions, or increase carbon storage in agricultural soils  
             and woody biomass.

          2. Authorizes CDFA to provide support through the program that  
             may include, but is not limited to, permit assistance and  
             coordination and the funding of on-farm demonstration  
             projects to further the goals of the program. 









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          3. Deletes provisions relating to the 5-member Panel and instead  
             requires the Panel to consist of the Secretary of CDFA or his  
             or her designee, with the Secretary of CDFA as the chair, the  
             Secretary of the California Natural Resources Agency (CNRA)  
             or his or her designee, the Secretary for the Environmental  
             Protection Agency (CalEPA), or his or her designee, one  
             member appointed by the Secretary of CalEPA with expertise in  
             climate change, as specified, one member appointed by the  
             Secretary of the CNRA, affiliated with the California  
             Association of Resource Conservation Districts, four members  
             appointed by the Secretary with specified expertise, and one  
             member affiliated with the University of California  
             Cooperative Extension.

          4. Adds to the duties of the Panel, reviewing and advising the  
             Secretary and the State Board of Food and Agriculture on  
             proposed programs and projects, including, but not limited  
             to, competitive grants, that provide technical educational,  
             and financial assistance to agricultural producers that will  
             result in multiple environmental and health benefits,  
             including, but not limited to, reduced GHG emissions and  
             increased carbon storage.

          5. Requires the Panel to review and recommend to the Secretary  
             and relevant state agencies the appropriate uses of available  
             tools to demonstrate and quantify greenhouse gas emission  
             reductions.

          6. Requires the Panel to submit a biennial report on their work,  
             the Panel's action plan for the next two years, and requires  
             the first report to occur no later than two years after the  
             Panel's first meeting or January 1, 2019, whichever occurs  
             first.

          7. Specifies $50 million, from the GGRF, upon appropriation by  
             the Legislature, to be available to the department to support  
             on-farm projects to demonstrate agricultural management  
             practices and activities that reduce greenhouse gas emissions  
             and increase carbon storage in agricultural soils and woody  
             biomass, including:

             A.    Soil-building and carbon sequestration practices;

             B.    Irrigation efficiency and water conservation measures;








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             C.    On-farm alternative energy production and energy  
                efficiency;

             D.    Wildlife habitat conservation.

          8. Requires CDFA, in consultation with the Panel, to develop and  
             implement a grant program to implement the above projects and  
             carry out the purposes of the Cannella Environmental Farming  
             Act.  

          9. Requires the SGC, in consultation with CDFA and the Panel, to  
             establish and administer a grant program as part of the  
             Sustainable Agricultural Lands Conservation Program (SALCP),  
             to provide financial incentives for the adoption and use of  
             land management practices that reduce GHGs, sequester carbon,  
             and provide other cobenefits on working agricultural  
             operations.

          10.Specifies that no less than 2% annually of GGRF monies be  
             continuously appropriated for agricultural land protection,  
             as a part of SGC's Affordable Housing and Sustainable  
             Communities Program. 

          Background

          1.Environmental Farming Program and Panel.

            The Cannella Environmental Farming Act of 1995 created the  
            Environmental Farming Program within CDFA and established a  
            panel for that program.

            In August 2011, CDFA Secretary Karen Ross announced  
            appointments to the Environmental Farming Act Science Advisory  
            Panel.  The panel is charged with reviewing and documenting  
            agriculture's positive impacts to the environment and will  
            examine issues such as ecosystem services and how they relate  
            to agriculture.  The panel has produced a two-year report on  
            initiatives and work completed to date.

          2.Sustainable Agricultural Lands Conservation Program.
             
            The Budget Act of 2014 appropriates $130 million from the GGRF  
            to develop and implement the Affordable Housing and  








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            Sustainable Communities Program (AHSC).  SB 862 (Committee on  
            Budget and Fiscal Review), Chapter 36, Statutes of 2014,  
            continuously appropriates 20% of GGRF annual proceeds to the  
            AHSC beginning in FY 2015-16.  The AHSC, administered by the  
            SGC, is tasked with reducing greenhouse gas emissions through  
            projects that implement land use, housing, transportation, and  
            agricultural land preservation practices to support infill and  
            compact development.

            The SGC approved guidelines on January 20, 2015, for the  
            agricultural land preservation component of the program dubbed  
            the Sustainable Agricultural Lands Conservation Program.  The  
            SALC program is intended to integrate and leverage existing  
            agricultural land protection programs, as established in  
            various sections of statute.

            According to the guidelines, the principal goal of this grant  
            program is to fund sustainable agricultural land strategy  
            plans and permanent agricultural conservation easements in  
            order to avoid increases in greenhouse gas emissions  
            associated with agricultural lands, consistent with AB 32. The  
            guidelines cite recent University of California research that  
            estimates that land in agricultural and healthy open space use  
            sequesters up to 70 times more carbon than any form of urban  
            development.  The guidelines also specify that in future  
            years, the
            Council intends to add a third program element to provide  
            incentives for land management practices that lead to  
            additional reductions of GHG on agricultural lands.

            As the program is funded through moneys from the GGRF, the  
            program must document how expenditures will reduce GHG  
            emissions and further the purposes of AB 32.  The eligibility  
            and selection criteria presented in the guidelines are  
            designed to prioritize projects that demonstrate the greatest  
            potential for protecting lands most at risk of conversion to  
            other purposes and the program intends to estimate the amount  
            of GHG emission reductions of these projects based on GHG  
            emissions attributable to a more intensive development of the  
            land should its protection for agricultural purposes via the  
            program not occur. In addition to GHG emissions reductions,  
            the program also considers co-benefits of projects, including  
            water conservation, economic benefits, improved air quality,  
            nutrient cycling, energy conservation, wildlife habitat, and  








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            others. 

          3.Background on Cap-and-Trade Funds.

            ARB has conducted ten cap-and-trade auctions, generating  
            almost $1.6 billion in proceeds to the state. 

            Several bills in 2012, and one in 2014, provide legislative  
            direction for the expenditure of auction proceeds including SB  
            535 (De León), Chapter 830, Statutes of 2012, AB 1532 (J.  
            Pérez), Chapter 807, Statutes of 2012, SB 1018 (Budget  
            Committee), Chapter 39, Statutes 2012, and SB 862 (Budget  
            Committee), Chapter 36, Statutes of 2014.

            SB 535 (De León), Chapter 830, Statutes of 2012, requires that  
            25% of auction revenue be used to benefit disadvantaged  
            communities and requires that 10% of auction revenue be  
            invested in disadvantaged communities. 

            AB 1532 (J. Pérez), Chapter 807, Statutes of 2012, directs the  
            Department of Finance to develop and periodically update a  
            three-year investment plan that identifies feasible and  
            cost-effective GHG emission reduction investments to be funded  
            with cap-and-trade auction revenues.  AB 1532 requires GGRF  
            moneys be used to facilitate the achievement of GHG emission  
            reductions. 

            SB 1018 (Budget Committee), Chapter 39, Statutes of 2012,  
            created the GGRF, into which all auction revenue is to be  
            deposited.  The legislation requires that before departments  
            can spend moneys from the GGRF, they must prepare a record  
            specifying: (1) how the expenditures will be used, (2) how the  
            expenditures will further the purposes of AB 32, (3) how the  
            expenditures will achieve GHG emission reductions, (4) how the  
            department considered other non-GHG-related objectives, and  
            (5) how the department will document the results of the  
            expenditures. 

            SB 862 (Budget Committee), Chapter 36, Statutes of 2014,  
            requires the ARB to develop guidelines on maximizing benefits  
            for disadvantaged communities by agencies administering GGRF  
            funds, and guidance for administering agencies on GHG emission  
            reduction reporting and quantification methods. 









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            Legal consideration of cap-and-trade auction revenues: The  
            2012-13 Budget analysis of cap-and-trade auction revenue by  
            the Legislative Analyst's Office noted that, based on an  
            opinion from the Office of Legislative Counsel, the auction  
            revenues should be considered mitigation fee revenues, and  
            their use requires that a clear nexus exist between an  
            activity for which a mitigation fee is used and the adverse  
            effects related to the activity on which that fee is levied.  
            Therefore, in order for their use to be valid as mitigation  
            fees, revenues from the cap-and-trade auction must be used to  
            mitigate GHG emissions or the harms caused by GHG emissions. 

            In 2012, the California Chamber of Commerce filed a lawsuit  
            against the ARB claiming that cap-and-trade auction revenues  
            constitute illegal tax revenue. In November 2013, the superior  
            court ruling declined to hold the auction a tax, concluding  
            that it's more akin to a regulatory fee. 

            Emergency drought relief legislation, SB 103 (Budget  
            Committee), Chapter 2, Statutes of 2014, appropriated $10  
            million to the CDFA water and energy efficiency projects in  
            the agricultural sector.  The statute requires that the moneys  
            be used to establish and implement a program before July 1,  
            2014, to provide financial incentives to agricultural  
            operations to invest in water irrigation treatment and  
            distribution systems that reduce water and energy use, augment  
            supply and increase water and energy efficiency in  
            agricultural applications through the installation of water  
            efficient irrigation systems and use of renewable sources of  
            energy for pumping. 

            Budget allocations:  The 2014-15 Budget allocates $832 million  
            in GGRF revenues to a variety of transportation, energy, and  
            resources programs aimed at reducing GHG emissions.  Various  
            agencies are in the process of implementing this funding.  The  
            budget agreement specifies how the state will allocate most  
            cap-and-trade auction revenues in 2015-16 and beyond.  For all  
            future revenues, the legislation appropriates 25% for the  
            state's high-speed rail project, 20% for affordable housing  
            and sustainable communities grants, 10% to intercity capital  
            rail projects, and 5% for low-carbon transit operations.  The  
            remaining 40% is available for annual appropriation by the  
            Legislature. Of that 40%, $15 million was appropriated to CDFA  
            to fund agricultural energy and operational efficiency  








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            programs, with $12 million directed for financial assistance  
            for the installation of dairy digesters, and $3 million to  
            support deployment and use of renewable natural gas, its  
            analogues, and other low-carbon renewable biofuels derived  
            from agricultural waste, for use in the transportation sector.  


            The Governor's proposed 2015-16 cap-and-trade expenditures  
            propose $1.02 billion in spending, with $15 million dedicated  
            to fund agricultural energy and operation efficiency programs  
            through CDFA. 

            Comments
          
          1. Purpose of Bill.  

             According to the author, "California's agriculture industry  
             contributes more than $40 billion annually to our state's  
             economy.  Climate change, however, threatens the continued  
             viability of this industry.  The latest science suggests that  
             future challenges will include rising temperatures, increases  
             in extreme weather events, constrained water resources,  
             reduced winter chilling hours, and rising sea levels.  As we  
             enter the fourth year of an extreme drought, it is clear that  
             farmers and ranchers are on the frontlines of climate  
             impacts.

             "California agriculture is also uniquely positioned to  
             provide climate benefits by reducing greenhouse gas  
             emissions.  Research funded by the California Energy  
             Commission's Public Interest Energy Research program suggests  
             that some agricultural practices will not only reduce  
             greenhouse gas emissions, but can also help to store  
             atmospheric carbon in soils, trees and other woody plants.   
             Many of the most effective climate protection strategies  
             provide additional environmental co-benefits such as enhanced  
             on-farm resilience to climate impacts, improved air and water  
             quality, water conservation, enhanced wildlife habitat and  
             healthy rural communities.

             "The Environmental Farming Act of 1995 (Cannella, 1995)  
             created the Environmental Farming Panel, an advisory  
             committee to the California Department of Food and  
             Agriculture.  The Panel was created to promote farming  








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             practices that 'contribute to the well-being of ecosystems,  
             air quality and wildlife and their habitat.'  However, the  
             1995 Act did not anticipate the agricultural challenges and  
             opportunities presented by climate change and should be  
             updated.

             "As proposed in SB 367, the modernization of the  
             twenty-year-old Environmental Farming Act gives the  
             California Department of Food and Agriculture the authority  
             and resources to more effectively deliver programs and  
             improve growers' access to resources for addressing climate  
             change and other pressing environmental concerns.

             "Additionally, the Strategic Growth Council is implementing a  
             program, funded by the Greenhouse Gas Reduction Fund, to  
             protect agricultural land and promote beneficial land  
             management practices for their climate benefits.  However,  
             the Council currently lacks sufficient resources to meet the  
             demand for projects that prevent the conversion of  
             agricultural lands to more greenhouse gas intensive  
             development.

             "SB 367 gives CDFA and the Strategic Growth Council the  
             authority and resources to more effectively deliver programs  
             and improve growers' access to resources for addressing  
             climate change and other pressing environmental concerns."

          2. Scientific Advisory Panel.

             The bill deletes provisions of the Cannella Environmental  
             Farming Act that establish the Scientific Advisory Panel as a  
             five-member body that requires members to be "highly  
             qualified and professionally active or engaged in the conduct  
             of scientific research."  Instead, SB 367 sets up a  
             nine-member advisory Panel with the Secretary of CDFA, or his  
             or her designee as the chair, the Secretary of CalEPA and  
             Natural Resources Agency as ex-officio voting members (or  
             their designees), and other members appointed by the various  
             Secretaries, including three members who are agricultural  
             producers and one member affiliated with the University of  
             California Cooperative Extension.  Only one member, appointed  
             by the Secretary of the Environmental Protection Agency, is  
             required to have expertise in climate change.  This member is  
             required to be a member of a nonprofit organization. 








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             The makeup of the Panel in SB 367 leads to the following  
             policy concerns/questions: 

             A.    The setup of the Panel, with the Secretary of CDFA as  
                the chair, sets up an unconventional and possibly  
                ineffective structure, with the Secretary as the chair of  
                the Panel advising him or herself.  Additionally, the  
                Secretary of CalEPA and the Natural Resources Agency, or  
                their designees, are voting ex-officio members.  Is this  
                necessary or appropriate on a Scientific Advisory Panel?   
                Would it instead make more sense to have experts appointed  
                by those positions, to inform the Secretary of CDFA and  
                his or her agency on best agricultural practices for  
                environmental sustainability?  In this way, instead of  
                having the various secretaries on the Panel, information  
                from the Panel to the Secretary of CDFA, and subsequently  
                from CDFA to CalEPA and CNRA, could occur through bodies  
                already created for interagency coordination and  
                collaboration such as the Climate Action Team or the  
                Strategic Growth Council, of which all of the Secretaries  
                are members. 

             B.    Although still called the Scientific Advisory Panel in  
                the bill, SB 367 does not require any members of the Panel  
                be trained as a scientist.  Similarly to what existing law  
                prescribes for the Panel, SB 367 requires members of the  
                Panel be "highly qualified and professionally active in  
                their chosen field or engaged in the conduct of scientific  
                research." 

                Among the duties of the Panel are the following:
                             Review data on the impact of agriculture on  
                     the environment and recommend that data to  
                     appropriate state agencies;
                             Compile the net environmental impacts of  
                     agriculture on the environment;
                                                                                                 Research, review and comment on data upon  
                     which proposed environmental policies and regulatory  
                     programs are based;
                             Review and advise the Secretary of CDFA on  
                     proposed programs and projects that provide  
                     assistance to agricultural producers and will result  
                     in multiple environmental health benefits; and








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                             Help develop guidelines for a grant program  
                     for land management practices that reduce GHG  
                     emissions. 

             As the duties include both the review of scientific  
             information and the implementation of those findings as they  
             pertain to programs for agriculture and agricultural  
             producers, should the Panel instead require a mix of  
             scientific experts in agriculture and environmental  
             sustainability as well as members that have on-the-ground  
             expertise in sustainable agriculture to best accomplish their  
             duties?  

             Should those categories be broader than requiring members be  
             affiliated with either the California Association of Resource  
             Conservation Districts, or affiliated with the UC California  
             Cooperative Extension?

             As the grant fund created by SB 367 would expend  
             cap-and-trade auction revenue for GHG emission reduction  
             practices related to agriculture, should there be a member of  
             the Panel with expertise in agricultural GHG emission  
             reduction practices?

             Additionally, SB 367 specifies that the secretaries will be  
             ex-officio voting members.  Do science advisory panels  
             require votes, or is it more appropriate that they develop  
             recommendations by consensus? 

             SB 367 also specifies that the Secretary can appoint  
             "nonvoting ex officio" members to the panel.  Adding  
             additional members to the panel may add greater depth of  
             knowledge and experience, but "ex officio" pertains to a  
             member who is part of the panel by virtue of holding another  
             office.  Is this requirement necessary, or should the  
             Secretary have more flexibility in appointing members to the  
             Panel? 

             To address these concerns, the committee may wish to consider  
             amendments that do the following:

                   (1)        Specify that Secretaries designate members  
                     of the Panel, instead of sitting on the Panel,  
                     themselves;








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                   (2)        Remove the specification that the  
                     Secretaries' designees be ex-officio voting members;
                   (3)        Delete the requirement that additional  
                     members added to the panel by the Secretary be  
                     "nonvoting ex-officio" members.
                   (4)        Authorize the Secretary designate the chair  
                     of the Panel. 
                   (5)        Delete the nonprofit requirement for one  
                     member appointed by the Secretary of CalEPA, and  
                     require that the other appointee by the Secretary of  
                     CalEPA have expertise in GHG emission reduction  
                     practices related to agriculture.
                   (6)        Delete the requirement that one member  
                     appointed by the Secretary of NRA be associated with  
                     the California Association of Resource Conservation  
                     Districts, and instead require one member has  
                     training and expertise in the field of agricultural  
                     conservation practices and resource management.
                   (7)        Delete the requirement that one member  
                     appointed by the Secretary of CDFA be affiliated with  
                     the University of California Cooperative Extension,  
                     and instead require that they have training and  
                     expertise in the field of agricultural and  
                     environmental science.
                   (8)        Require that a minimum of two members be  
                     actively engaged in scientific research related to  
                     environmentally sustainable agriculture. 
                   (9)        Rename the entity the Environmental Farming  
                     Advisory Panel, since not all members are required to  
                     have scientific expertise. 
                   (10)       Reinstate the requirement that all members  
                     have at least five years of experience in their  
                     respective fields.

          1. Updating Existing Law. 

             The Cannella Environmental Farming Act was enacted in 1995,  
             and has not been amended since that time.  

             SB 367 builds on the existing statute and reworks the  
             Scientific Advisory Panel and adds requirements for the  
             development of a grant program funded through GGRF, but there  
             are several areas where the existing Act should be updated  
             and modernized. 








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             A.    Scientific Advisory Panel. 

                (1)        Although the Panel was created in the Act, the  
                     code doesn't specifically require that the Panel  
                     advise the Secretary on the Environmental Farming  
                     Program, and instead requires the Panel to "advise  
                     and assist federal, state, and local government  
                     agencies on issues relating to air, water, climate  
                     change, and wildlife habitat."  

                     As the Panel seems intended to advise the Secretary  
                     on the EFP, and other agencies have their own  
                     respective Panels to give advice on relevant  
                     environmental issues, amendments are needed to delete  
                     those provisions and instead specify that the Panel  
                     is required to advise the Secretary on implementation  
                     of the Environmental Farming Program, and assist  
                     other agencies as appropriate or necessary on issues  
                     relating to the impact of agricultural practices on  
                     air, water, climate change and wildlife habitat. 

                (2)        The Act specifies that CDFA may assist in the  
                     compilation of scientific data from public and  
                     private sources, and that the department shall serve  
                     as the depository for that information and provide it  
                     to federal, state, and local governments as needed. 

                     CDFA does not need statutory authority to perform  
                     these functions.  

                     Additionally, the Panel was created in the Act in  
                     order to review scientific information and compile  
                     information on net environmental impacts of  
                     agriculture on the environment and SB 367 requires  
                     them to produce a report with their findings.  An  
                     amendment is needed to strike the provisions relating  
                     to CDFA compiling and providing scientific  
                     information and serving as the depository of this  
                     information. 

                (3)        The Act requires the Panel to review data on  
                     agricultural impacts to the environment and recommend  
                     to state agencies data that the Panel has determined  








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                     as valid. 

                     Additionally state agencies that receive this  
                     recommended data are required to notify and document  
                     the reasons for not utilizing this data within 180  
                     days. 

                     Instead of this overly prescriptive and burdensome  
                     statute, it may be more appropriate to instead  
                     require the Panel to, after their review of data,  
                     recommend the best available science on environmental  
                     impacts from agriculture, and from this information,  
                     develop recommendations on practices and policies to  
                     advance the goals of the Environmental Farming  
                     Program. 

                (4)        The Act requires the Panel to compile the  
                     scientific information above.  An amendment is needed  
                     to clarify that this information is for use by the  
                     department, and other relevant state agencies, as  
                     well as the public. 


          2. Recommendation of GHG Emission Reduction Quantification  
             Tools. 

             SB 367 currently requires the Panel to review and recommend  
             to the Secretary and other agencies, the appropriate uses of  
             available tools to demonstrate and quantify GHG emission  
             reductions. 

             SB 367, as amended, would only requires one member on the  
             Panel have expertise in GHG emissions reductions from  
             agriculture. 

             Does the Panel have the technical expertise to review GHG  
             emission reduction quantification tools, or should this be  
             done in conjunction with ARB in the guidance they create for  
             agencies for expending GGRF funds and quantification  
             methodology and tracking procedures?  

             The committee may wish to amend the bill to strike the  
             provision that the Panel review and recommend to the  
             Secretary and other agencies the appropriate use of these  








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             tools, and instead require that ARB consider these tools for  
             GHG emission reduction quantification, and recommend them, as  
             appropriate, in the guidance they are required to develop for  
             agencies expending GGRF moneys. 

          3. Different Programs To Do Similar Things.

             SB 367 sets up a grant program within the Environmental  
             Farming Program, designed to demonstrate GHG emission  
             reductions from projects including soil-building and  
             carbon-sequestration practices, irrigation efficiency and  
             water conservation measures, on-farm alternative-energy  
             production and energy efficiency, and wildlife habitat  
             conservation. 

             As noted in the background section, the 2014 drought relief  
             package appropriated $10 million of the GGRF moneys for  
             reduction of GHG emissions through water efficiency and  
             renewable energy for water pumping for agricultural  
             operations, to be administered by CDFA. 

             Additionally, the 2014-15 Budget appropriated $15 million to  
             CDFA from the GGRF to fund agricultural energy and  
             operational efficiency for installation of dairy digesters  
             and deployment of renewable natural gas.  This year's  
             proposed budget also appropriates $15 million to CDFA for  
             that same purpose. 

             In this way, SB 367 appropriates $50 million for potentially  
             many of the same projects that have been, or will be funded  
             through previous appropriations of GGRF.  SB 367 is somewhat  
             more expansive than existing programs, however, and allows  
             for projects that include soil-building and carbon  
             sequestration practices including the increased use of  
             compost and biochar, cover crops and low-and no-till  
             practices. 

             However, this latter category would receive GGRF funds from  
             two distinct programs: (1) The EFP funded through the $50  
             million GGRF appropriation described above, and (2) a  
             continuous appropriation of 2% of proceeds appropriated to  
             the Strategic Growth Council for the Affordable Housing and  
             Sustainable Communities Program to fund agricultural land  
             protection (including projects that use land management  








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             practices that reduce GHG emissions through soil and woody  
             biomass sequestration) as part of the SALC program.  SALC is  
             administered through the Department of Conservation. 

             The bill has language that requires a memorandum of agreement  
             between CDFA, Natural Resources Agency, the Department of  
             Conservation, and other relevant state agencies to ensure  
             coordination and collaboration in implementing the grant  
             program created by SB 367 as a part of the EFP.  This may  
             help with ensuring the various programs created by the bill  
             are complementary and not competing. 

          4. Which Cobenefits? 

             The bill directs that, as part of the SALC program, financial  
             incentives be directed to fund practices that reduce GHG  
             emissions, sequester carbon and provide other cobenefits.   
             The committee may wish to specify which cobenefits, including  
             more efficient water usage, reduced fertilizer and pesticide  
             use, as well as improved air and water quality.

          5. 2% Continuous Appropriation and SALC. 

             The bill specifies that 2% of the annual proceeds from GGRF  
             appropriated to SGC be expended for agricultural land  
             protection, and cites a section that SB 367 adds to the code  
             on requiring a new grant program for land management  
             practices be developed as part of the SALC program.  The SALC  
             program guidelines specify that they are currently planning  
             to fund conservation easements and land conservation planning  
             and that they plan to incorporate financial assistance for  
             land management practices in the future.  SB 367 requires  
             that a program to provide incentives for land management  
             practices to reduce GHG emissions be implemented no later  
             than the 2015-16 year.  However, because the bill only  
             references the statute that requires incentives for land  
             management practices, it is unclear whether the 2%  
             appropriation is intended to encompass the other SALC  
             projects, including conservation easements and planning that  
             are currently being implemented.

             This should be clarified as the bill moves forward. 

          6. Technical Amendments. 








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             A.    The Act contains language that requires the EFP to  
                provide incentives to farmers whose practices promote  
                sustainable agriculture.  However, SB 367 amends the act  
                to specify, in addition to incentives, low-interest loans,  
                and creates a grant program through GGRF moneys.  As the  
                bill now specifies the type of incentives to be provided  
                to agricultural producers, the word, "incentives," should  
                be struck from the Act. 

             B.    The bill requires the Panel to review and advise the  
                Secretary on proposed programs and projects.  An amendment  
                is needed to require them to also advise the Secretary on  
                existing programs and projects. 

             C.    Additionally, SB 367 specifies that the Panel advise on  
                "proposed programs and projects, including, but not  
                limited to, competitive grants, that provide technical,  
                educational, and financial assistance to agricultural  
                producers."  A clarifying amendment is needed to specify  
                competitive grants as a type of financial assistance, to  
                read, "?existing and proposed programs and projects that  
                provide technical, educational, and financial assistance,  
                including, but not limited to, competitive grants?"

            Related/Prior Legislation

          AB 761 (Levine), currently in the Assembly Water, Parks, and  
          Wildlife Committee, would provide $50 million to the Department  
          of Conservation to establish a grant program to fund projects  
          that increase carbon sequestration in agricultural soils.

            SOURCE:               California Climate and Agriculture Network
                         Community Alliance with Family Farmers  
          
           SUPPORT:               
          American Farmland Trust
          Audubon California
          Californians Against Waste
          California Association of Resource Conservation Districts
          California Farm Bureau Federation 
          California League of Conservation Voters
          Carbon Cycle Institute
          Center for Biological Diversity








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          Center for Food Safety
          Coastal Environmental Rights Foundation 
          Community Environmental Council
          Defenders of Wildlife
          Environment California
          Environmental Defense Fund
          Environmental Entrepreneurs
          Greenbelt Alliance
          Peninsula Open Space Trust
          Roots of Change
          Sustainable Agriculture Education
          Sustainable Conservation
          The Trust for Public Land
          West Marin Environmental Action Committee 
          53 Individuals
           
           OPPOSITION:    
          California Chamber of Commerce  

           DOUBLE REFERRAL:
          This measure was heard in Senate Agriculture Committee on April  
          7, 2015, and passed out of committee with a vote of 5-0.
           
           
              
           
           
                                          
                                      -- END --