BILL ANALYSIS Ó
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Wieckowski, Chair
2015 - 2016 Regular
Bill No: SB 1294
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|Author: |Pavley |
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|Version: |4/4/2016 |Hearing | 4/20/2016 |
| | |Date: | |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Joanne Roy |
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SUBJECT: The Community Climate and Drought Resilience Program
of 2016
ANALYSIS:
Existing law:
1) Requires the California Environmental Protection Agency
(CalEPA), in coordination with the State Water Resources
Control Board (SWRCB), the Air Resources Board (ARB), and the
Department of Food and Agriculture (CDFA), to establish
policies to encourage recycling of organic waste and
coordinate oversight and regulation of organic waste
recycling facilities. (Public Resources Code (PRC)
§422649.87 et seq.)
a) Requires CalEPA, in coordination with specified
agencies, to develop and implement policies to aid in
diverting organic waste from landfills by promoting the
use of agricultural, forestry, and urban organic waste as
a feedstock for compost and by promoting the appropriate
use of that compost throughout the state.
b) Requires CalEPA to promote a goal of reducing at least
5 million metric tons of greenhouse gas emissions (GHGs)
annually through the development of working lands, such as
agricultural lands, land used for forestry, and rangeland.
c) Requires specified agencies to assess the state's
progress towards developing the organic waste processing
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and recycling infrastructure necessary to meet the
specified state goals, such as the May 2015 Short-Lived
Climate Pollutant Reduction Strategy and the Healthy Soils
Initiative.
d) Requires specified agencies to develop recommendations
for promoting organic waste processing and recycling
infrastructure statewide no later than January 1, 2017,
and update annually thereafter.
2) Establishes the California Urban Forestry Act of 1978 to
expand and improve the management of trees and related
vegetation in communities throughout the state. (PRC §4799.06
et seq.).
3) 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 and requires the Department of Finance,
in consultation with ARB and any other relevant state agency,
to develop, as specified, a three-year investment plan for
the moneys deposited in the GGRF. (Government Code
§16428.8).
4) 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. (Health and Safety Code §39712).
This bill:
1) Enacts the Community Climate and Drought Resilience Program
of 2016.
2) Makes several findings and declarations.
3) Requires the Department of Forestry and Fire Protection
(CalFire) to review urban forestry program implementation and
revise the program, if necessary, to provide funding priority
to multibenefit carbon sequestration projects and to
establish local or regional targets for urban tree canopy.
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4) By July 1, 2017, requires CalRecycle, in consultation with
relevant state agencies, to establish an incentives program
for the use of compost from organic waste in farming and
landscaping practices that increase drought resiliency and
result in GHG emission reductions through increased carbon
sequestration in urban and rural areas.
5) Requires CalRecycle to contract with state-certified
conservation corps to assist in community outreach, compost
delivery and application, and other urban greening projects.
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Background
1) Carbon sequestration.
According to the U.S. Geological Survey (USGS), carbon
sequestration is used to describe both natural and deliberate
processes by which CO2 is either removed from the atmosphere
or diverted from emission sources and stored in the ocean,
terrestrial environments (vegetation, soils, and sediments),
and geologic formations.
Terrestrial sequestration (sometimes referred to as "biological
sequestration") is typically through forest and soil
conservation practices that enhance the storage of carbon
(such as restoring and establishing new forests, wetlands,
and grasslands) or reduce CO2 emissions (such as reducing
agricultural tillage and suppressing wildfires).
2) Carbon storage in soils.
According to the U.S. Environmental Protection Agency (US EPA),
the stock of carbon in soils is the result of a balance
between inputs (usually plant matter) and outputs (primarily
CO2 flux during decomposition of organic matter). The entire
portion of carbon held in the soil and undergoing
decomposition is collectively referred to as "soil organic
matter" (SOM) or "soil organic carbon".
According to Dr. Jeff Creque of the Carbon Cycle Institute, to a
large degree, soil productivity is linked to the amount of
carbon it contains. Carbon improves the tilth and water
retention capabilities of soil and it is a central element in
SOM, that component of dirt that contains all the biological
residues and byproducts that make plants grow. Soils act as
a sink for carbon, storing exponentially more carbon than
persists in the atmosphere as CO2 along with more potent GHGs
such as methane and nitrous oxide. By increasing soil
carbon, soil fertility and water retention capacity is
increased. This results in more robust vegetation, which
captures more carbon from the atmosphere. The carbon is
stored underground in the roots, residual dry matter (on the
surface) and in enhanced populations of microorganisms in the
soil.
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3) Compost.
According to CalRecycle, compost is the controlled decomposition
of organic material such as leaves, twigs, grass clippings,
and food scraps. A wide range of materials may be composted,
but they must consist of principally organic components (i.e.
carbon-containing remnants or residues of life processes).
Compost products may vary since the properties of any given
compost depend on the nature of the original feedstock and
the conditions under which it was decomposed. However,
mature compost is normally dark brown in color and should
have an even texture and a pleasant, earthy aroma.
Composting is a means of controlling and accelerating the
decomposition process. An overabundance of soil organisms is
responsible for transforming the organic matter in compost
into carbon dioxide, water, humic substances (components of
soil that affect physical and chemical properties and improve
soil fertility) and energy in the form of heat.
Composting diverts organic materials out of landfills and turns
it into a product that is useful for soil restoration. In
addition to improving the quality of the soil, compost
prevents soil erosion, reduces the need for chemical
fertilizers, herbicides, and pesticides, and enables better
soil water retention.
4) Regulating compost.
a) A coordinated effort.
Multiple state agencies are involved with regulating
composting. CalRecycle permits compostable material
handling operations and facilities. ARB is charged with
monitoring and regulating sources of emissions of GHGs
that cause global warming in order to reduce GHG
emissions. CDFA annually inspects compost facilities
selling to organic food producers for adherence to
National Organic Program regulations. SWRCB and the
regional water quality control boards issue individual
waste discharge permits for larger composting facilities.
Last year, the Legislature passed, and the Governor signed,
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AB 1045 (Irwin, Chapter 596, Statutes of 2015) which
requires CalEPA, in coordination with relevant agencies,
to develop and implement policies to aid in diverting
organic waste from landfills by promoting the use of
agricultural, forestry, and urban organic waste as
feedstock for compost and by promoting the appropriate use
of that compost throughout the state. In addition, AB
1045 requires the group of agencies to develop
recommendations for promoting organic waste processing and
recycling infrastructure statewide and update annually
thereafter.
b) Healthy Soils Initiative.
The term "healthy soils" refers to ensuring that agricultural
soils have adequate soil organic matter or soil carbon
content. Increasing the amount of soil organic matter can
provide multiple benefits, such as: being a source of
nutrients for plants, water retention, effect on the
persistence and biodegradability of pesticides, carbon
sink that prevents the escape of CO2 and methane GHG to
the atmosphere, soil structure stability and reduced
erosion.
In his 2015-16 budget proposal, Governor Brown directed $10
million from GGRF toward a new "Healthy Soils Initiative"
to increase carbon in soil to improve soil health,
agricultural productivity, soil water-holding capacity,
and decreased sediment erosion. Governor Brown directed
the California Department of Food and Agriculture (CDFA),
under its existing authority provided by the Canella
Environmental Farming Act, to coordinate with other key
agencies to work on several new initiatives. CDFA has
since developed five action measures: protect and restore
soil carbon; identify funding opportunities, including
market development; provide research, education and
technical support; increase governmental efficiencies to
enhance soil health on public and private lands; and
ensure interagency coordination and collaboration.
5) Farming and GHG reductions.
Various agricultural practices can significantly reduce GHG
emissions, and sequester carbon. GHG reduction and
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sequestration strategies in the agricultural sector include
reduced energy usage through more efficient watering systems,
such as drip irrigation; reduced nitrogen fertilizer usage;
shifting tilling practices to improve soil carbon retention;
changing livestock feed and practices to reduce livestock
enteric rumination, manure management where manure is
converted to alternative fuels; and establishing perennial
vegetation on land retired from agriculture production to
sequester carbon in plants and soil. In addition, recent
research also suggests that applications of compost may
result in greater carbon sequestration in soils.
Many of these land management practices to reduce or sequester
GHGs also result in significant environmental cobenefits,
such as improved water efficiency, improved air and water
quality, and greater resiliency of agricultural land to
climate change.
6) Safeguarding California.
According to the Senate Natural Resources & Water Committee's
analysis on this bill, Safeguarding California is a climate
adaptation strategy, which was released in early 2016,
provides an integrated climate adaptation and resiliency
program. The report highlights that many effective climate
adaptation strategies cross "sectoral and jurisdictional
boundaries" and responding to climate risks requires
coordination across agencies and political boundaries. Later
versions of Safeguarding California are expected to continue
the emphasis on cross-sector integration and complementarity
of approaches to promote climate resiliency and adaptation.
7) Urban forestry program.
According to the Senate Committee on Natural Resources & Water's
analysis on this bill, CalFire's urban forestry program leads
the effort to advance the development of sustainable urban
and community forests in California and CalFire works closely
with numerous groups to achieve these aims. Existing law
recognizes that urban forestry projects may provide multiple
benefits to the community including, for example, increasing
water supply, promoting energy conservation, reducing GHG
emissions and improving public health, among others.
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8) Cap-and-trade auction revenue.
Since November 2012, ARB has conducted 14 cap-and-trade
auctions, generating over $4 billion in proceeds to the
state.
State law specifies that the auction revenues must be used to
facilitate the achievement of GHG emissions reductions and
outlines various categories of allowable expenditures.
Statute further requires the Department of Finance, in
consultation with ARB and any other relevant state agency, to
develop a three-year investment plan for the auction
proceeds, which are deposited in the GGRF.
Disadvantaged communities.
SB 535 (de León, Chapter 830, Statutes of 2012) requires the
Department of Finance, in the investment plan, to allocate at
least 25% of available moneys in the GGRF to projects that
provide benefits to disadvantaged communities, and at least
10% to projects located within disadvantaged communities.
To meet the SB 535 mandate, the Office of Environmental
Health Hazard Assessment, under CalEPA's guidance, developed
a tool (termed CalEnviroScreen) to assess and rank census
tracts across the state that are disproportionately affected
by multiple types of pollution and areas with vulnerable
populations. CalEPA has designated 25% of census tracts in
California as disadvantaged communities for the purpose of
investing cap-and-trade proceeds.
Additionally, SB 862 (Committee on Budget and Fiscal Review,
Chapter 36, Statutes of 2014) requires ARB to develop
guidelines on maximizing benefits for disadvantaged
communities by agencies administering GGRF funds.
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
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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 is more akin to a regulatory fee. In
February of 2014, the plaintiffs filed an appeal with the 3rd
District Court of Appeal in Sacramento. That case is
currently pending.
Budget allocations.
SB 862 (Committee on Budget and Fiscal Review, Chapter 36,
Statutes of 2014) established a long-term cap-and-trade
expenditure plan by continuously appropriating portions of
the funds for designated programs or purposes. The
legislation appropriates 25% for the state's high-speed rail
project, 20% for affordable housing and sustainable
communities grants, 10% to the Transit and Intercity Rail
Capital Program, and 5% for low-carbon transit operations.
The remaining 40% is available for annual appropriation by
the Legislature.
The Governor's proposed 2016-17 budget allocates $3.1 billion
GGRF revenues to a variety of transportation, energy, and
resources programs aimed at reducing GHG emissions.
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Comments
1) Purpose of Bill.
According to the author:
As part of his 2015 inaugural address, the Governor
outlined six key pillars needed to achieve long term
climate change inducing pollutant reductions, including the
reduction of short-lived climate pollutants, increased
carbon sequestration in the land and safeguarding
California by maximizing climate resilience and adaptation
strategies.
This year, the Department of Finance and ARB finalized
California's latest climate investment blueprint; the plan
outlined a multitude of sound investment opportunities for
California's climate investments built on the Governor's
key strategies to address climate change. The plan further
noted that to achieve our long term climate pollutant
emissions goals, the state will need to accelerate current
programs and projects, pursue innovative strategies across
sectors and maximize environmental, economic and health
co-benefits.
SB 1294 integrates the concepts outlined in Governor
Brown's inaugural address and the Second Investment Plan
and provides an opportunity for the state to approach
several key climate pollution and reduction strategies
(trees and urban greening, landscape resiliency, water
conservation and efficiency, and organic waste and compost)
via a set of complementary and innovative programs.
2) What's the funding source?
This bill requires CalRecycle to create a new program to provide
incentives for the use of compost from organic waste in
farming and landscaping practices that increase drought
resilience and result in GHG emissions reductions through
carbon sequestration in urban and rural areas.
This bill does not identify a funding source. However, the
background information provided by the author states that
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this bill "[e]stablishes a program that prioritizes
investment in projects that maximize GHG emissions, climate
resiliency benefits and co-benefits across multiple sectors
(e.g. stormwater capture and reuse for an urban forestry
project not only potentially reduces net carbon from the
water system but also ensures the tree does not die (ensures
GGRF investment produces carbon reduction benefits) and
increases urban canopy (also potential to reduce carbon)
while also reducing the chance the tree is drought stressed
and ultimately succumbs to bark beetle (climate resiliency
benefits)." It appears that a likely funding source for this
bill may be GGRF.
3) Piece by piece.
GGRF investments must facilitate the achievement of GHG
emissions reductions. However, after that requirement is
fulfilled, there are a number of other policy goals that
should be considered, including benefits to environmental
quality, resource protection, public health and the economy,
as well as benefits to disadvantaged communities. Various
policy committees have been referred proposals for investing
GGRF moneys, and these committees will likely consider
whether proposals meet basic statutory requirements and align
with legislative priorities. However, in order to create an
optimized investment strategy from GGRF moneys, proposals
should not be considered in isolation, but be assessed in
aggregate to evaluate which set of proposals best meets the
requirements of the fund, uses resources most efficiently,
and maximizes policy objectives. As the budget committees
are considering the Governor's proposal of GGRF expenditures,
the budget process may be an ideal way to comprehensively
consider the numerous policy bills that propose new programs
funded through the GGRF.
4) Creating another funding program?
This bill requires CalRecycle, by July 1, 2017, in consultation
with relevant state agencies, to develop and implement a
program that provides incentives for compost-related projects
that increase drought resilience and result in quantifiable
reductions in GHG emissions through increased carbon
sequestration in urban and rural areas.
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Establishing a new program takes effort and money to administer.
For example, public engagement/outreach and workshops are
necessary to create the program; staff time is required to
review proposals and process funds. For FY 2016-17,
CalRecycle expects the administration costs alone for the
Organics Grant Program to be $3 million. Also, anytime a new
program is created, and funded through GGRF, there are
various requirements that need to be met by the agency
administering the program as well as ARB. ARB must provide
new program guidance on how to report and quantify GHG
reductions and on how to maximize benefits to disadvantaged
communities. Each administering agency must prepare an
expenditure report to document how the program will reduce
GHG emissions. Creating disparate programs that have the
same goals and purpose as existing state efforts may create
governmental inefficiencies and avoidable expenses.
5) Work with what we already have.
Last year, the Legislature passed, and the Governor signed, AB
1045 (Irwin, Chapter 596, Statutes of 2015) which, among
other things, requires CalEPA, in coordination with relevant
state agencies, to develop and implement policies to aid in
diverting organic waste from landfills by promoting the use
of agricultural, forestry, and urban organic waste as
feedstock for compost and by promoting the appropriate use of
that compost throughout the state. The first set of
recommendations from these efforts is due January 1, 2017,
and must be annually updated thereafter.
SB 1294, by July 1, 2017, would require CalRecycle, in
consultation with relevant state agencies, to create a
program that provides incentives for the use of compost in
certain projects that increase carbon sequestration in urban
and rural areas.
The first set of compost recommendations mandated by AB 1045 is
due when SB 1294 would go into effect. What if the agencies'
recommendations, which were mandated by the Legislature less
than a year ago, differ in direction, scope, or proposed
actions than the program in SB 1294? It may be more prudent
to work within the existing statutory structure that
officially began four months ago and is expected to provide
the first annual set of recommendations eight months from
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now. A question arises as to whether the purpose of the
program proposed in SB 1294 may best fit within the AB 1045
framework of the relevant agencies working to develop and
implement policies to promote the appropriate use of compost
throughout the state.
In order to ensure that CalEPA's coordinated efforts with
relevant agencies, pursuant to AB 1045, consider ways to use
compost as a means of increasing carbon sequestration in
urban and rural areas, the Committee may wish to consider
amending SB1294 by replacing Chapter 3 on Page 6, lines 11-26
with the following:
a) An amendment to add a paragraph to PRC §42649.87(c)
mandating the assessment of the state's programs on how
they may increase the use of compost in order to increase
carbon sequestration in urban and rural areas.
b) An amendment to add promotion to the use of compost
throughout the state to PRC §42649.87(c)(4), which
currently pertains to the development of recommendations
for promoting organic waste and recycling infrastructure.
c) An amendment to add a section to PRC Chapter 12.9,
pertaining to organic waste, to require the appropriate
agency to develop a program that implements policies to
promote the use of compost, if recommended to do so
pursuant to PRC §42649.87(c)(4).
6) State-certified conservation corps.
The local conservation corps program was established in 1993
with the purpose of supporting the success of disadvantaged
youth through a structured program of natural resources
conservation and related activities. There are approximately
13 certified local corps in the state. This bill requires
CalRecycle to enter into an agreement with state-certified
conservation corps to assist with community outreach, compost
delivery and application, and other urban greening projects.
A question arises as to whether it is prudent to limit such
an opportunity to only 13 corps considering other local
organizations exist around the state that also provide
workforce training to youth in disadvantaged communities.
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In conjunction with the proposed committee amendments in Comment
#5, the committee may wish to consider amending the bill to
add a paragraph to PRC §42649.87(c) mandating the assessment
of the state's programs on how they may incorporate workforce
training to youth in disadvantaged communities when feasible.
Related/Prior Legislation
AB 1045 (Irwin, Chapter 596, Statutes of 2015) requires CalEPA
in coordination with specified agencies, to among other things,
develop and implement policies to aid in diverting organic waste
from landfills by promoting the use of agricultural, forestry,
and urban organic waste as a feedstock for compost and by
promoting the appropriate use of that compost throughout the
state.
DOUBLE REFERRAL:
This measure was heard in the Senate Natural Resources & Water
Committee on March 29, 2016, and passed out of committee with a
vote of 7-2.
SOURCE: TreePeople, Los Angeles Conservation Corps,
and Los Angeles Neighborhood Land Trust
SUPPORT:
California Association of Local Conservation Corps
California League of Conservation Voters
Clean Water Action
Earth Watch Institute
From Lot to Spot, Inc.
Los Angeles Beautification Team
The Trust For Public Land
OPPOSITION:
None received
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