BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                        SB 367|
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                                   THIRD READING 

          Bill No:  SB 367
          Author:   Wolk (D)
          Amended:  6/2/15  
          Vote:     21  

           SENATE AGRICULTURE COMMITTEE:  5-0, 4/7/15
           AYES:  Galgiani, Cannella, Berryhill, Pan, Wolk

           SENATE ENVIRONMENTAL QUALITY COMMITTEE:  7-0, 4/29/15
           AYES:  Wieckowski, Gaines, Bates, Hill, Jackson, Leno, Pavley

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 5/28/15
           AYES:  Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen

           SUBJECT:   Agricultural lands:  greenhouse gases
          
          SOURCE:    California Climate and Agricultural Network
                     Community Alliance with Family Farmers
          
          DIGEST:   This bill recasts and expands the membership and the  
          duties of the California Department of Food and Agriculture's  
          (CDFA) Science Advisory Panel on Environmental Farming to  
          include on-farm practices to reduce greenhouse gas emissions and  
          increase carbon storage in soil.  This bill appropriates $25  
          million from the Greenhouse Gas Reduction Fund to CDFA for the  
          establishment of a new grant program to support these  
          activities.  This bill also appropriates 2% of the proceeds from  
          this fund to the Strategic Growth Council's Sustainable  
          Agricultural Lands Conservation Program to also address on-farm  
          reductions of greenhouse gas and increased carbon storage.

          ANALYSIS:   

          Existing law:

          1)Requires the CDFA, through the Cannella Environmental Farming  
            Act of 1995, to establish and oversee an environmental farming  








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            program that provides incentives to farmers whose practices  
            promote the well-being of ecosystems, air quality, and  
            wildlife and their habitat.  

          2)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.   
            
           3)Establishes in 2008 the Strategic Growth Council as a  
            cabinet-level committee that is 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 (Nunez,  
            Chapter 488, Statutes of 2006) goals.  

          4)Establishes the Affordable Housing and Sustainable Communities  
            (AHSC) Program, administered by the Strategic Growth Council  
            in 2014, to reduce greenhouse gas (GHG) emissions though  
            projects that implement land use, housing, transportation, and  
            agricultural land preservation practices.  
           
           5)Establishes the Sustainable Agricultural Lands Conservation  
            (SALC) Program as 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.

          6)Requires the California Air Resources Board (ARB), through the  
            California Global Warming Solutions Act of 2006 (referred to  
            as AB 32, Health and Safety Code §38500 et seq.), to determine  
            the 1990 statewide 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 Greenhouse  
            Gas Reduction Fund (GGRF). (According to the Senate  








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            Environmental Quality Committee analysis).

          7)Requires that the GGRF only be used to facilitate the  
            achievement of reductions of GHG emissions consistent with AB  
            32 (Health and Safety Code §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% of the funds to projects that benefit  
            disadvantaged communities and to allocate 10% of the funds to  
            projects located within disadvantaged communities.   
            Additionally, ARB, in consultation with California  
            Environmental Protection Agency (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. (According to the Senate Environmental Quality  
            Committee analysis). 

          This bill:

           1) Makes findings and declarations in regards to California  
             agricultural productivity and agriculture's contribution to  
             the environment and reduction of GHGs.

           2) Renames CDFA's Scientific Advisory Panel on Environmental  
             Farming to the Environmental Farming Advisory Panel (Advisory  
             Panel).

           3) Expands the duties of CDFA's Environmental Farming Program  
             (EFP) to specifically include activities related to the  
             reduction of on-farm GHG emissions and increased carbon  
             storage in agricultural soils and woody biomass. 

           4) Authorizes CDFA to support these on-farm practices and  
             activities by providing permit assistance and coordination  
             and the funding of on-farm demonstration projects.

           5) Deletes CDFA's authority to assist in the compilation and  
             depository of scientific data from public and private sources  
             identifying the net environmental impacts of agriculture on  








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             the environment.

           6) Adds "climate change" to the list of issues that may be  
             addressed by CDFA's newly termed Advisory Panel when  
             providing advice and assistance to government agencies.

           7) Recasts and expands the duties and membership of the  
             Advisory Panel as specified.

           8) Provides $25 million, upon appropriation by the Legislature,  
             to CDFA to support on-farm projects to demonstrate  
             agricultural management practices and activities that reduce  
             GHG emissions and increase carbon storage in soils and woody  
             biomass.  Projects may include, but are not limited to,  
             soil-building and carbon-sequestration practices, irrigation  
             efficiency and water conservation measures, on-farm  
             alternative-energy production and efficiency, and wildlife  
             habitat conservation.

           9) Requires CDFA, in consultation with the Advisory Panel, to  
             develop and implement a grant program to support the  
             activities listed above.

           10)Requires the secretaries of CDFA and the Natural Resources  
             Agency to enter into a memorandum of agreement, including  
             other relevant state agencies, to ensure the greatest  
             possible coordination and collaboration in implementing these  
             programs and projects.

           11)Requires that no less than 2% of GGRF proceeds be  
             appropriated to the Strategic Growth Council to be expended  
             for agricultural land protection within the grant program,  
             below.

           12)Requires the Strategic Growth Council to establish and  
             administer a grant program, as part of the SALC Program, to  
             provide incentives for the adoption and use of land  
             management practices that would reduce GHG emissions and  
             sequester carbon in soils and woody biomass.
             
          Background









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          The Cannella Environmental Farming Act of 1995 requires the 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 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.  The Science 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  
          activities of member 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.  

          The AHSC Program, administered by the Strategic Growth Council,  
          was created in 2014 to reduce greenhouse gas (GHG) emissions  
          though 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 SALC Program is one component of the AHSC and is implemented  
          by the DOC.  The Strategic Growth Council is responsible for  
          overseeing the SALC Program 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  








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          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.

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

          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.  (According to the Senate Environmental Quality  
          Committee analysis).

          Comments
          
          Agriculture and Climate Change.  Farmers and ranchers are  
          uniquely sensitive to the effects of climate change as  
          agriculture is largely dependent upon uncertain weather patterns  
          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 employees due to reduced workload and productivity. 

          The potential for agriculture to contribute to the reduction 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  








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          have been and are continuing to be adopted to reduce negative  
          effects on the environment such as drip irrigation, reduced land  
          tillage, nitrogen management, and the use of cover crops.  This  
          bill would provide funding to continue the development and  
          implementation of on-farm management practices to further the  
          environmental benefits of California's agricultural lands.

          [Note:  See Senate Agriculture Committee and Senate  
          Environmental Quality Committee analyses for a full discussion  
          of this bill]
          
          FISCAL EFFECT:   Appropriation:    Yes         Fiscal  
          Com.:YesLocal:   No

          According to the Senate Appropriations Committee, "This bill  
          would specify that $25 million shall be available, upon  
          appropriation by the Legislature, to support three specific  
          programs at CDFA." 
          
          SUPPORT:  (Verified  6/2/15)

          California Climate and Agriculture Network (CalCAN) (co-source)
          Community Alliance with Family Farmers (co-source)
          Abbott Ranch
          Agricola: flora et fauna
          Alameda County Resource Conservation District
          American Farmland Trust
          Association of Compost Producers
          Audubon California 
          Berry Blest Farm
          Big Bluff Ranch
          Burroughs Family Farms
          Burroughs Family Orchards
          Burrows Ranch, Inc.
          Cachuma Resource Conservation District
          California Association of Resource Conservation Districts
          California Certified Organic Farmers
          California Cloverleaf Farms
          California Compost Coalition
          California Farm Bureau Federation
          California FarmLink 
          California Institute for Rural Studies








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          California League of Conservation Voters
          California State Grange
          Californians Against Waste
          Camp Grant Ranch
          Canvas Ranch
          Carbon Cycle Institute
          Center for Food Safety
          Central Valley Farmland Trust
          Coastal Environmental Rights Foundation
          Community Environmental Council
          Defenders of Wildlife
          Dixon Ridge Farms
          Eaton Cattle Co.
          Ecological Farming Association 
          Eden Urban Farms
          Environment California 
          Environmental Action Committee of West Marin
          Environmental Defense Fund
          Environmental Entrepreneurs
          Four Elements Organics
          Foxwhelp Farm
          Frog Hollow Farm
          Full Belly Farm
          Grass Valley Grains
          Green Oaks Creek Farm
          Greenbelt Alliance
          Harpos Organics
          Hilltop & Canyon Farms
          Humboldt Regeneration Brewery & Farm
          Jackrabbit Farms
          Jacobs Farm/Del Cabo
          Kern Family Farm
          Land Trust of Santa Cruz County
          Live Earth Farm
          Mamen Consulting
          Markegard Family Grass-Fed, LLC
          Molino Creek Farm
          Morris Grassfed
          Occidental Arts and Ecology Center
          Page's Organics
          Paicines Ranch
          Peninsula Open Space Trust








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          Pie Ranch
          Porter Creek Vineyards
          Quetzal Farm
          Resource Conservation District of Santa Cruz County
          Riverdance Farms
          Rominger Brothers Farm
          Roots of Change
          Samuels Ranch
          San Diego Roots Sustainable Food Project
          San Mateo County Resource Conservation District
          Santa Clara Valley Open Space Authority
          Sierra Farms Lamb
          Sonoma Resource Conservation District
          Sustainable Agriculture Education
          Sustainable Conservation
          Swanton Berry Farm
          The Mendocino Grain Project
          The Trust for Public Land
          Travaille & Phippen, Inc.
          Valley Land Alliance
          Viriditas Farm
          Wild Farm Alliance
          Wild Willow Farm and Education Center
          Yolo County Resource Conservation District

          OPPOSITION:   (Verified6/2/15)

          California Chamber of Commerce

          ARGUMENTS IN SUPPORT:  According to the author, "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."

          According to those in support, "Growers around the state have  
          already begun to see the effects of drought, decreased chilling  
          hours and extreme heat on their productivity and profitability.   
          At the same time, growers and scientists recognize the  
          tremendous potential for agriculture and agricultural lands to  
          not only reduce existing greenhouse gas emissions, but also to  








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          draw down atmospheric carbon into soils and woody biomass."

          ARGUMENTS IN OPPOSITION:     According to the California Chamber  
          of Commerce, "CalChamber supports the cost-effective  
          implementation of AB 32.  CARB's decision to arbitrarily  
          withhold and sell (auction) allowances will raise billions of  
          dollars at the expense of California businesses and consumers.   
          This approach runs contrary to expressed goals of AB 32, which  
          is maximizing benefits and minimizing leakage risks and costs.   
          As CalChamber has long held, CARB lacks authority to raise  
          revenue through the auction of allowances.  Given the  
          substantial legal uncertainties surrounding CARB's authority to  
          impose an auction, expending the proceeds is premature;"  
          therefore the California Chamber of Commerce is opposed to this  
          bill that would fund on-farm agricultural management projects  
          with AB 32 auction revenues.



          Prepared by:Anne Megaro / AGRI. / (916) 651-1508
          6/2/15 20:13:17
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