BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 367 (Wolk) - Agricultural lands:  greenhouse gases
          
           ----------------------------------------------------------------- 
          |                                                                 |
          |                                                                 |
          |                                                                 |
           ----------------------------------------------------------------- 
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Version: May 6, 2015            |Policy Vote: AGRI. 5 - 0, E.Q.  |
          |                                |          7 - 0                 |
          |                                |                                |
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Urgency: No                     |Mandate: No                     |
          |                                |                                |
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Hearing Date: May 18, 2015      |Consultant: Robert Ingenito     |
          |                                |                                |
           ----------------------------------------------------------------- 


          This bill meets the criteria for referral to the Suspense File.




          


          Bill  
          Summary: SB 367 would (1) recast and expand the membership and  
          the duties of the California Department of Food and  
          Agriculture's (CDFA's) Science Advisory Panel on Environmental  
          Farming to include on-farm practices to reduce greenhouse gas  
          emissions, and (2) specify $50 million, upon appropriation from  
          the Legislature, from the Greenhouse Gas Reduction Fund (GGRF)  
          to CDFA to support these activities.  


          Fiscal Impact:










          SB 367 (Wolk)                                          Page 1 of  
          ?
          
          
                 The bill would specify $50 million, upon appropriation  
               by the Legislature, from GGRF (special fund) to fund  
               programs that reduce greenhouse gas emissions and increase  
               carbon storage on farms. In addition, two percent of the 20  
               percent of GGRF revenues being continuously appropriated to  
               the Strategic Growth Council would be dedicated for  
               agricultural land preservation. Overall, GGRF would fund  
               the following administrative costs:

                  o         CDFA indicates that it would incur annual  
                    costs of $2 million to administer the program.

                  o         The California Air Resources Board (ARB)  
                    indicates that it would incur costs of $1.7 million in  
                    2016-17, $1.5 million in 2017-18, and $1.1 million  
                    ongoing to collaborate with CDFA and the Strategic  
                    Growth Council, as specified.

                  o         Costs to the Department of Conservation are  
                    unknown but likely of similar magnitude to implement  
                    the Sustainable Agricultural Lands Conservation  
                    program.



          
          The Cannella Environmental Farming Act of 1995 requires 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 (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.  The Panel is also  
          authorized to research, review, and comment on data used as the  
          base for proposed environmental policies and regulatory programs  
          so that agricultural activities are accurately portrayed and to  
          identify incentives to encourage agricultural practices with  
          environmental benefits.  


          The Strategic Growth Council was created in 2008 as a  
          cabinet-level committee that is tasked with coordinating the  








          SB 367 (Wolk)                                          Page 2 of  
          ?
          
          
          activities of specified state agencies to improve air and water  
          quality, protect natural resources and agricultural lands,  
          increase the 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 California Global Warming Solutions Act of 2006 (referred to  
          as AB 32, HSC §38500 et seq.) requires ARB to determine the 1990  
          statewide greenhouse gas (GHG) emissions level, to approve a  
          statewide GHG emissions limit equivalent to that level that will  
          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 the regulations.  All  
          monies, except for fines and penalties, collected pursuant to a  
          market-based mechanism are deposited in the GGRF.


          Current law requires that the GGRF only be used to facilitate  
          the achievement of reductions of GHG emissions consistent with  
          AB 32 (HSC §39710 et seq.). To this end, the Department of  
          Finance, in consultation with the ARB and any other relevant  
          state agencies, is required to develop, as specified, a  
          three-year investment plan for the moneys deposited in the GGRF.  
          The investment plan must allocate a minimum of 25 percent of the  
          funds to projects that benefit disadvantaged communities and to  
          allocate 10 percent of the funds to projects located within  
          disadvantaged communities. Additionally, ARB, in consultation  
          with CalEPA, is required to develop funding guidelines for  
          administering agencies receiving allocations of GGRF funds that  
          include a component for how agencies should maximize benefits to  
          disadvantaged communities.


          The Affordable Housing and Sustainable Communities Program  
          (AHSC), administered by the Strategic Growth Council, was  
          created in 2014 to reduce GHG emissions though projects that  








          SB 367 (Wolk)                                          Page 3 of  
          ?
          
          
          implement land use, housing, transportation, and agricultural  
          land preservation practices.  The AHSC program receives 20  
          percent of the annual proceeds from GGRF to achieve these goals.  
           


          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.




          Proposed Law:  
          This bill would do all of the following:
           Specify 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.


           Authorize 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. 








          SB 367 (Wolk)                                          Page 4 of  
          ?
          
          


           Rename the Panel as the Environmental Farming Advisory Panel,  
            and make specified modifications. 


           Require 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.


           Require 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.


           Specify $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:


               o      Soil-building and carbon sequestration practices;


               o      Irrigation efficiency and water conservation  
                 measures;


               o      On-farm alternative energy production and energy  
                 efficiency;


               o      Wildlife habitat conservation.


           Require 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  








          SB 367 (Wolk)                                          Page 5 of  
          ?
          
          
            Act. 


           Require SGC, in consultation with CDFA and the Panel, to  
            establish and administer a grant program as part of SALC, 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.


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




          Related  
          Legislation: AB 761 (Levine), currently in the Assembly  
          Committee on Natural Resources, would provide $50 million to the  
          Department of Conservation to establish a grant program to fund  
          projects that increase carbon sequestration in agricultural  
          soils to increase the resilience of working lands to climate  
          change and drought.


          Staff  
          Comments: As noted above, the bill would specify that no less  
          than two percent annually of GGRF monies be continuously  
          appropriated for agricultural land protection, as a part of  
          SGC's Affordable Housing and Sustainable Communities Program.  
          Staff notes that, mathematically speaking, two percent of twenty  
          percent (the overall amount of the allocation) equals 0.4  
          percent. It is unclear if the author's intent is this amount, or  
          two percentage points, be used for agricultural land protection.  






                                          









          SB 367 (Wolk)                                          Page 6 of  
          ?
          
          


                                      -- END --