BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  August 26, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          SB 367  
          (Wolk) - As Amended August 17, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill establishes a $25 million grant fund, upon  
          appropriation by the Legislature from the Greenhouse Gas  
          Reduction Fund (GGRF), for projects that reduce greenhouse gas  
          (GHG) emissions from agricultural operations, as specified.   








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          This bill expands and revises the membership and duties of the  
          California Department of Food and Agriculture's (CDFA)  
          Environmental Farming Act Science Advisory Panel (Panel) to  
          include on-farm practices to reduce GHG emissions and increase  
          carbon storage in soil.  Specifically, this bill:


          1)Renames CDFA's Scientific Advisory Panel on Environmental  
            Farming, the Environmental Farming Act Advisory Panel.

          2)Expands CDFA's environmental farming program (Program)  to  
            specifically include activities related to the reduction of  
            on-farm GHG emissions and increased carbon storage in  
            agricultural soils and woody biomass.





          3)Specifies that incentives provided by the Program may include  
            grants, loans, research, technical assistance, or educational  
            materials and outreach. 



          4)Authorizes CDFA to support on-farm practices and activities by  
            providing permit assistance and coordination, and by funding  
            demonstration projects that further the goals of the program. 
          5)Adds the impact of agriculture on climate change to the list  
            of issues that may be addressed by the Panel when providing  
            advice and assistance to government agencies.



          6)Revises the membership of the Panel to consist of nine members  
            as specified











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          7)Authorizes a state agency that receives data recommended by  
            the Panel to adopt and incorporate the data into the  
            appropriate program.  If a state agency does not use the data  
            recommended, requires the agency to provide the Panel with a  
            written statement of reasons.  

          8)Requires the Panel to submit a biennial report on their work  
            as specified.





          9)Requires the Air Resources Board (ARB) to provide guidance on  
            GGRF expenditures.



          10)Requires the Strategic Growth Council (SGC) to establish and  
            administer a grant program, as part of the Sustainable  
            Agricultural Lands Conservation (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, and provide other cobenefits on  
            working agricultural operations.  Requires at least 2% of GGRF  
            proceeds to be appropriated to SGC for the grant program.


          11)Requires CDFA to develop and implement a grant program to  
            reduce GHG emissions and increase carbon storage in  
            agricultural soils and woody biomass, including:





             a)   Soil-building and carbon sequestration practices.








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             b)   Irrigation efficiency and water conservation measures.


             c)   Alternative energy production and energy efficiency. 


             d)   Wildlife habitat conservation. 





          12)Specifies that $25 million from the GGRF, upon appropriation  
            by the Legislature, will be available to CDFA for the above  
            grant program and to carry out the purposes of the bill.

          13)Requires the Secretaries of CDFA and NRA to enter into a  
            memorandum of agreement among CDFA, the Department of  
            Conservation, and other relevant state agencies to ensure the  
            greatest possible coordination and collaboration in  
            implementing these programs and projects.



          FISCAL EFFECT:


          1)Cost pressures of up to $25 million to fund the CDFA grant  
            program including annual CDFA grant administrative costs of an  
            estimated $2 million (GGRF).


          2)Increased initial ARB costs of $2 million and ongoing annual  
            costs of $1.2 to $1.6 million to provide guidance, develop  
            quantification methodologies for grant programs, and evaluate  
            projects.


          3)Additional unknown CDFA costs to expand the membership and  








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            duties of the Farming Act Science Advisory Panel.


          4)Unknown funding shifts within the SGC grant program.


          COMMENTS:


          1)Purpose. According to the author, this bill modernizes the  
            Environmental Farming Act of 1995 to ensure that California  
            maximizes its opportunities to achieve voluntary GHG emission  
            reductions in the state's agriculture sector by developing and  
            promoting projects and on-farm practices that also have other  
            environmental and health benefits.  
            


            Upon appropriation,  this bill will also direct $25 million to  
            the CDFA for a grant program to support on-farm demonstration  
            projects, and will direct 2% of the GGRF annual proceeds to  
            the Strategic Growth Council's Sustainable Agricultural Lands  
            Conservation Program.  






          2)Background.  The Cannella Environmental Farming Act of 1995  
            requires CDFA to establish and oversee an environmental  
            farming program to provide incentives to farmers with  
            practices that 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 advise and assist government agencies, provide  
            recommendations, and conduct scientific data reviews. The  
            Panel is to identify incentives to encourage agricultural  
            practices with environmental benefits.  








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            The California Global Warming Solutions Act of 2006 (AB 32,  
            Chapter 488, Statutes of 2006), requires ARB 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 GGRF.


            Current law requires that the GGRF only be used to facilitate  
          the achievement of reductions   of GHG emissions consistent with  
          AB 32. To this end, the Department of Finance, in       
          consultation with the ARB and any other relevant state agencies,  
          is required to             develop a      three-year investment  
          plan for GGRF proceeds.    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 n      
          communities.





          Analysis Prepared by:Jennifer Galehouse / APPR. / (916)  
          319-2081









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