BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1294 (Pavley) - The Community Climate and Drought Resilience
Program of 2016
-----------------------------------------------------------------
| |
| |
| |
-----------------------------------------------------------------
|--------------------------------+--------------------------------|
| | |
|Version: April 27, 2016 |Policy Vote: N.R. & W. 7 - 2, |
| | E.Q. 5 - 1 |
| | |
|--------------------------------+--------------------------------|
| | |
|Urgency: No |Mandate: No |
| | |
|--------------------------------+--------------------------------|
| | |
|Hearing Date: May 9, 2016 |Consultant: Narisha Bonakdar |
| | |
-----------------------------------------------------------------
This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 1294 requires the California Environmental
Protection Agency (CalEPA) and the Department of Food and
Agriculture (CDFA), in coordination with specified state
entities, to develop, annually update, and post to the CalEPA's
website, recommendations for promoting the use of compost
throughout the state by
January 1, 2018. The bill would also require CalEPA and CDFA to
assess state programs to determine how those programs may
increase the use of compost for purposes of increasing carbon
sequestration in urban and rural areas. Finally, the bill would
require the California Department of Fire and Forestry (CalFIRE)
to review the urban forestry program implemented pursuant to the
California Urban Forestry Act of 1978, and revise the program to
achieve specified goals.
Fiscal Impact:
Unknown, but significant costs to CalEPA and CDFA, (Cap and
Trade) to develop recommendations for promoting the use of
SB 1294 (Pavley) Page 1 of
?
compost throughout the state, and assessing programs.
Unknown, but significant costs to CalFIRE (Cap and Trade) to
review and revise the urban forestry program.
Minor costs to the Department of Resources Recycling and
Recovery, the State Water Resources Control Board, and the
State Air Resources Board for consultation.
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
SB 1294 (Pavley) Page 2 of
?
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.
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
SB 1294 (Pavley) Page 3 of
?
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,
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
SB 1294 (Pavley) Page 4 of
?
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
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
SB 1294 (Pavley) Page 5 of
?
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.
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
SB 1294 (Pavley) Page 6 of
?
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 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%
SB 1294 (Pavley) Page 7 of
?
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.
Proposed Law: This bill:
Requires the CalEPA and CDFA, in coordination with specified
state entities, to develop, and annually update,
recommendations for promoting the use of compost throughout
the state by January 1, 2018.
Requires the recommendations to be posted on CalEPA's website
Requires CalEPA and CDFA to assess state programs to determine
how those programs may increase the use of compost for
purposes of increasing carbon sequestration in urban and rural
areas.
Requires the California Department of Fire and Forestry review
the urban forestry program implemented pursuant to the
California Urban Forestry Act of 1978, and revise the program
to achieve specified goals.
-- END --