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 --