BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                               Senator Wieckowski, Chair
                                 2015 - 2016  Regular 
           
          Bill No:            SB 1363
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          |Author:    |Monning                                              |
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          |Version:   |3/28/2016              |Hearing      |4/20/2016       |
          |           |                       |Date:        |                |
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          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Dan Brumbaugh                                        |
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          SUBJECT:  Ocean Protection Council:  Ocean Acidification and  
          Hypoxia Reduction Program

            ANALYSIS:
          
          Existing law: 
          
          1) Under federal law, pursuant to the Magnuson-Stevens Fishery  
             Conservation and Management Act (1976) and subsequent revisions  
             and reauthorizations in 1996 and 2007, designates eelgrass beds  
             as an Essential Fish Habitat (EFH) habitat area of particular  
             concern (HAPC) for various federally-managed fish species  
             within the Pacific Coast Groundfish Fishery Management Plan,  
             developed by the Pacific Fisheries Management Council in 2008.  
             EFH is defined as the waters and substrate necessary for fish  
             for spawning, breeding, feeding, or growth to maturity, and an  
             HAPC is a subset of EFH that is rare, particularly susceptible  
             to human-induced degradation, especially ecologically  
             important, and/or located in an environmentally stressed area.  
             HAPC designations are used to provide additional focus for  
             conservation efforts (16 USC §1855).

          2) Considers vegetated shallows that support eelgrass as special  
             aquatic sites under the 404(b)(1) guidelines of the Clean Water  
             Act (40 CFR §230.43).

          3) Under state law, pursuant to the McAteer-Petris Act (Government  
             Code §66600 et seq.) and the California Coastal Act (Public  
             Resources Code §30000 et seq.), mandates protection and  
             restoration of submerged marine habitats.







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          4) Created the California State Coastal Conservancy in 1976 to  
             protect and improve natural lands and waterways, to help people  
             get to and enjoy the outdoors, and to sustain local economies  
             along California's coast. The Conservancy is a non-regulatory  
             agency that supports projects to protect coastal resources and  
             increase opportunities for the public to enjoy the coast.  
             (Chapter 1441, Statutes of 1976; PRC §31000 et seq.)

          5) Establishes the California Ocean Protection Council (OPC) and  
             the California Ocean Protection Trust Fund (OPTF) through SB  
             1319 (Burton, Alpert, Chapter 719, Statutes of 2004) to  
             coordinate, streamline, and improve the effectiveness of  the  
             state's oversight of its ocean resources; designate ocean and  
             marine ecosystems as a public trust; and promote ocean  
             protection policies based on sound science.  The OPC  
             administers the OPTF to carry out its duties, and to make  
             grants or loans to public agencies, non-profits or private  
             entities for projects that protect and enhance ocean resources,  
             as specified, including the development of monitoring and  
             scientific data to improve state efforts to protect and  
             conserve ocean resources. (PRC §35600 et seq.)

          6) Through Proposition 84, also known as the "Safe Drinking Water,  
             Water Quality and Supply, Flood Control, River and Coastal  
             Protection Bond Act of 2006" (Chapter 7, Statutes of 2006),  
             provides $90 million dollars over the course of 10 years to the  
             OPTF to fund priority OPC projects. (PRC §75060(g))

          This bill:

          1) Makes a series of findings and declarations regarding eelgrass  
             ecosystems, as specified.

          2) Requires the OPC, in coordination with the State Coastal  
             Conservancy and to the extent that funds are available from  
             bonds or other sources, to establish and administer the Ocean  
             Acidification and Hypoxia Reduction Program (Program) for the  
             purposes of achieving the following goals:

             a)    Developing demonstration projects to evaluate the best  
                locations that are optimal for implementing carbon for  
                implementing carbon dioxide (CO2) removal strategies,  
                including the protection and restoration of eelgrass beds;








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             b)    Generating an inventory of locations where conservation  
                or restoration of aquatic habitats, including eelgrass, can  
                be successfully applied to mitigate ocean acidification and  
                hypoxia; and

             c)    Incorporating consideration of CO2 removal during the  
                habitat restoration planning process in order to fully  
                account for the benefits of long-term carbon storage of  
                habitat restoration in addition to the habitat value.

          3) Directs the OPC, in advancing the Program to remove CO2 from  
             seawater to consider approaches that provide multiple  
             co-benefits, including, but not limited to, providing essential  
             fish and bird habitat, improving water quality, and mitigating  
             sea level rise.

            Background
          
          1) Emergence of general concern about ocean acidification. A  
             series of reports over the last two decades have documented  
             large-scale declines in the health of the state's ocean and  
             coastal ecosystems. These include the 1997 Resources Agency  
             report, California's Ocean Resources: An Agenda for the Future,  
             the 2003 Pew Oceans Commission report, America's Living Oceans:  
             Charting a Course for Sea Change, and the 2004 United States  
             Commission on Ocean Policy report, An Ocean Blueprint for the  
             21st Century. These earlier reports were wide-ranging,  
             synthetic, and influential in the state in that they led to the  
             creation of the OPC. Looking back, however, the limited  
             attention they devote to ocean acidification (OA) is striking  
             yet understandable, as the phenomenon was then relatively  
             poorly appreciated and studied. Ocean acidification is caused  
             by a series of chemical reactions that occur as the surface  
             waters of the ocean absorb a portion (about a third) of the  
             extra carbon dioxide (CO2) produced by human activities and  
             emitted into the atmosphere. These reactions result in seawater  
             that is more corrosive, with a lower pH ("acidification") and a  
             lower concentration of dissolved carbonate ions that many  
             marine organisms use to grow their shells and skeletons.

             More recently, awareness of OA impacts has grown within the  
             marine science, resource use, and management communities, which  
             has resulted in the ramping up of more OA research and  
             discussion of its implications for resource users and  
             management. Growing practical experience with impacts from  







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             changing ocean chemistry includes oyster farms, some of which,  
             for example, have learned to avoid in-taking seawater during  
             periods when it is harmful to young shellfish. Others are now  
             chemically treating batches of seawater in their facilities to  
             make it more suited to the needs of shellfish, but such  
             treatments are currently only feasible at the scale of smaller,  
             closed-system operations.

             The threats posed by increasing OA will be further compounded  
             by other dimensions of climate change, such as the  
             intensification and expansion of low dissolved oxygen - or  
             hypoxic - zones in the ocean. These regions form in part from  
             runoff that carries nutrients and organic carbon into the  
             ocean.  When spread across large enough areas, low levels of  
             dissolved oxygen can result in "dead zones" where mass die-offs  
             of fish and shellfish occur. In the coming decades, the impacts  
             of OA and hypoxia (OAH), which are already being felt across  
             West Coast systems, are projected to grow rapidly in intensity  
             and extent.

          2) Ocean acidification and California. In January 2016, the Senate  
             Natural Resources and Water Committee convened an Informational  
             Hearing where scientists discussed aspects of the emerging  
             science of OA. In April 2016, the multi-year, multi-state West  
             Coast Ocean Acidification and Hypoxia Science Panel (OAH Panel)  
             released an extensive report that summarizes current knowledge  
             of the science (which is still in its infancy), research  
             priorities, and recommendations for actions that can  
             nevertheless be taken by management now.

             According to the report, because of oceanographic circulation  
             dynamics in the North Pacific, California's coastal ecosystems  
             are particularly exposed to impacts of OA. And as with other  
             mitigation and adaptation aspects of carbon emissions, when it  
             comes to addressing OA, there is a cost to management inaction.  
             This is because OA impacts, and the difficulties of addressing  
             them, will only get worse in the foreseeable future.

             Although the changes to ocean carbonate chemistry that  
             California is experiencing are unavoidably linked to changes in  
             the concentration of atmospheric CO2 globally, there is a lag  
             of decades in the linkage between global atmospheric conditions  
             and our local coastal waters. This is because our upwelled  
             coastal waters originated as surface waters off of Japan 30-50  
             years prior. There at the surface, they absorbed CO2 from the  







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             atmosphere before sinking hundreds of feet below the surface as  
             they were transported across the North Pacific to the west  
             coast of North America. As the water was transported,  
             continuing biological respiration of organic particles released  
             more CO2, making the water naturally CO2 rich and lower in pH  
             and carbonate. This water then traveled down the west coast,  
             where, especially along certain parts of the coastline and  
             under certain seasonal wind conditions, it was upwelled and  
             spread across the continental shelf. Because of this transport  
             and enrichment process, the state of ocean chemistry off of  
             California's coast is 30-50 years behind the state of the  
             atmosphere. In other words, if rising atmospheric carbon  
             concentrations were to become instantaneously stabilized, we  
             would still be "locked into" increasing OA impacts for another  
             three or more decades.

             Although research about possible impacts is still emerging,  
             there is evidence to suggest that more extreme ocean chemistry  
             will push ecosystems beyond certain biological thresholds, such  
             as pH levels and carbonate concentrations that small young  
             shelled organisms in the plankton and along shores need to grow  
             and survive.

          3) Eelgrass ecology, conservation, and restoration. Eelgrass  
             refers to species of temperate seagrasses, which are a group of  
             flowering plants that grow submerged in marine, brackish, and  
             freshwaters. Two species, Zostera marina L. and Z. pacifica S.  
             Watson, are native to California, and a third, introduced  
             species, Z. japonica, is considered invasive and a threat to  
             tidelands where some commercial clam farms and recreational  
             clamming occur. Hereafter, "eelgrass" refers only to the native  
             species.

             According to NOAA Fisheries "California Eelgrass Mitigation  
             Policy and Implementing Guidelines" (October 2014), the state  
             supports dynamic eelgrass habitats that range in extent from  
             less than 11,000 acres to possibly as much as 15,000 acres  
             statewide.  This includes estimates for poorly documented beds  
             in smaller coastal systems as well as open coastal and insular  
             areas. While among the most productive of habitats, the overall  
             low statewide abundance makes eelgrass one of the rarest  
             habitats in California. Collectively, just five systems -  
             Humboldt Bay, San Francisco Bay, San Diego Bay, Mission Bay,  
             and Tomales Bay - support over 80% of the known eelgrass in the  
             state. The uneven distribution of eelgrass resources increases  







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             the risk to this habitat, and the narrow depth range within  
             which eelgrass can occur further places this habitat at risk in  
             the face of global climate change and sea level rise  
             predictions.

             Due to recognition of cumulative threats to the extent and  
             quality of eelgrass beds, and their ecological importance as  
             foundational species that provide food and habitat structure to  
             many other species within sheltered bay and estuarine  
             communities, eelgrass is a species of conservation concern.  
             Therefore, there are many examples of where eelgrass beds have  
             been inventoried and mapped at fine geographic scales as parts  
             of environmental impact assessments and mitigation plans for  
             coastal developments. There are also many small-scale eelgrass  
             restoration efforts underway as part of local, state, federal,  
             and international projects, often in partnership with  
             non-profit organizations. Variable degrees of success have  
             resulted from these efforts in California and around the world.

             Ecological research on seagrasses, including their responses to  
             changing ocean conditions, their ability to capture sediment  
             and sequester carbon, and their ability to modify local water  
             chemistry through photosynthesis and respiration, is still  
             growing, but the evidence to date suggests that some of these  
             ecological functions can vary substantially from place to  
             place, and over time. Further research is necessary to  
             determine the extent to which such complexity can be routinely  
             understood enough to be reasonably predictable.
            
          Comments
          
          1) Purpose of Bill.

             According to the author, "by investing in the restoration of  
             eelgrass beds on California's coast, SB 1363 leverages the  
             cobenefits of ocean acidification mitigation, sea-level rise  
             mitigation, carbon sequestration, water quality benefits, and  
             providing essential fish habitat, while also supporting the  
             state's coastal economy."

          2) Current OPC efforts and priorities. The OPC already has  
             existing authority to create an OAH Reduction Program, but  
             explicit statutory direction may increase the OPC's ability to  
             fund work in this area in the future. The OPC played a major  
             role in the development of the OAH Panel project, and the  







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             project goals mentioned in SB 1363 - demonstration research  
             projects, predictive spatial analyses, and more holistic  
             analysis and planning of restoration - are in line with OPC  
             interests in the areas of OA and hypoxia.

             Larger-scale, proof-of-concept demonstration projects, for  
             example, could estimate the extent to which the potential  
             OAH-mitigating benefits of photosynthesis within eelgrass beds  
             are balanced by respiration across daily and seasonal cycles.  
             Related questions include how far, for a given amount of  
             eelgrass and in what environmental conditions, does the spatial  
             "footprint" of such effects extend? What are the range of  
             settings and locations where eelgrass protection and  
             restoration will be most successful and beneficial? Can such  
             measures be employed in concert with other management actions  
             (e.g., improvements in water quality) to maximize conservation  
             benefits?

          3) Restoration challenges and expectations. Restoration of complex  
             ecosystems is always challenging, and eelgrasses and the  
             associated parts of their ecosystems are no exception. At a  
             minimum, ecosystem recovery is only likely to be effective  
             where ongoing threats and stressors to eelgrass beds and their  
             inhabitants have been largely eliminated. To the extent that  
             such issues remain, or the original eelgrass habitat has been  
             irreversibly changed (e.g., through dredging of ship channels  
             and building of port facilities), restoration of eelgrass  
             ecosystems will be impossible. Reviews of previous  
             transplantation efforts also reveal that, even where ecological  
             conditions seem conducive to eelgrass re-establishment,  
             expensive transplant efforts often have mixed levels of  
             success. These issues have repercussions for the cumulative  
             amount of carbon-mitigation and other co-benefits that the  
             state should realistically expect through eelgrass restoration  
             efforts.

          4) Funding? SB 1363, as an unfunded mandate, will require new,  
             unspecified funding to the Ocean Protection Trust Fund for full  
             OPC implementation. By the time SB 1363 comes into effect,  
             current funding for OPC programs through the Proposition 84  
             bond will have expired. The question therefore arises as to the  
             source of funding for this program.

          5) Programmatic flexibility & scientific rigor. SB 1363 mandates  
             in §35631(a), that the OPC, "in coordination with the State  







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             Coastal Conservancy, shall establish and administer" the new  
             Program, but there is no rationale in the bill for this  
             particular pairing of agencies, and an arbitrary statutory  
             mandate for one agency to coordinate with another in one of its  
             programs could be problematic. On the other hand, given the  
             role of the Ocean Science Trust (OST) in coordinating the OAH  
             Panel, coordinating the monitoring of the state's network of  
             marine protected areas, and co-chairing the OPC's Science  
             Advisory Team, OST could be considered as one of several  
             important partners in the listed projects.  Because the bill is  
             focused on improving the scientific basis for OAH-mitigation  
             through eelgrass restoration, and the Coastal Conservancy is  
             not primarily a scientific agency, the committee may wish to  
             amend the bill to also require OPC to consult with other  
             relevant agencies in the design and implementation of the  
             mandated research projects.

          6) Research needs. In §35631(a)(1), the bill specifies "to  
             evaluate the best locations that are optimal for implementing  
             carbon dioxide removal strategies, including the protection and  
             restoration of eelgrass beds."

             To provide additional guidance, changes are needed that  
             preserve the legislative intent, but suggest greater  
             impartiality about the most appropriate research approaches  
             while also recognizing some of the dynamic ecological  
             complexities in finding optima. An amendment is therefore  
             needed to replace the above language with "to research how  
             important environmental and ecological factors interact across  
             space and time to influence how geographically dispersed  
             eelgrass beds function for carbon dioxide removal and hypoxia  
             reduction."

          7) Clarifying amendments. There are places where proposed bill and  
             existing statutory language could be clarified.

             a)    In §35630(5), the bill states "?helping to mitigate sea  
                level rise." The committee may wish to clarify this to read  
                "?helping to mitigate  the impacts of  sea level rise."

             b)    In §35650(c), which SB 1363 will amend, statute states  
                "Grants or loans may be made to a private entity pursuant to  
                this section only for projects or activities that further  
                public purposes?" While technically not precluding grants or  
                loans to public entities, the existing language raises the  







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                question of whether greater clarity might be achieved with a  
                change to "Grants or loans may be made to a public or  
                private entity pursuant to this section only for projects or  
                activities that further public purposes?" 

            Related/Prior Legislation
          
          AB 2139 (Williams) requires that the Ocean Protection Council  
          shall facilitate research and compile data on the causes and  
          effects of ocean acidification and, no later than January 1, 2018,  
          shall adopt recommendations for further legislative and executive  
          actions to address ocean acidification.  AB 2139 is currently in  
          the Assembly Natural Resources Committee.
            
          DOUBLE REFERRAL:  

          This measure was heard in Senate Natural Resources and Water  
          Committee on 
          April 12, 2016, and passed out of committee with a vote of 7-2.
           
           SOURCE:               Audubon California  

           SUPPORT:               

          Azul
          Big Sur Land Trust
          Bolsa Chica Land Trust
          California Coastal Protection Network
          California League of Conservation Voters
          California Waterfowl Association
          Clean Water Action
          Monterey Bay Aquarium
          Morro Bay Oyster Company
          Ocean Conservancy
          Pacific Coast Shellfish Growers Association
          Peninsula Open Space Trust
          Sonoma County Agricultural Preservation and Open Space District
          Surfrider Foundation
           
           OPPOSITION:    

          None received  

           ARGUMENTS IN  
          SUPPORT:







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          According to Audubon California and other supporters, SB 1363  
          addresses the growing threat of ocean acidification and hypoxia  
          and the significant loss of critical eelgrass habitat along  
          California's coast. Recognizing the important role that eelgrass  
          plays in maintaining the overall health of coastal ecosystems,  
          migratory species, mitigating the effects of ocean acidification  
          and hypoxia, and sea level rise, Audubon California and others  
          support the overall framework of this bill.

          The California Waterfowl Association makes particular note of the  
          value of eelgrass beds for many waterfowl species, but especially  
          black brant, a sea goose species of Management Concern and a Focal  
          Species of the U.S. Fish and Wildlife Service.
                                                            The Monterey Bay Aquarium supports the bill, but also suggested  
          strengthening it with an amendment to require monitoring of the  
          effectiveness of carbon dioxide removal strategies applied under  
          the new Program. "Such monitoring would provide  
          management-relevant science to help the region better understand  
          ocean acidification and hypoxia, and measure success in addressing  
          it."

          The Pacific Coast Shellfish Growers Association and the Morro Bay  
          Oyster Company state that they generally support SB 1363's goals  
          to address ocean acidification and hypoxia, but request amendments  
          that better emphasize that shellfish farming, as a form of  
          sustainable aquaculture, is not the problem, but a victim when it  
          comes to ocean acidification. Moreover, according to the letters,  
          oyster farms can facilitate conditions conducive to eelgrass  
          growth. The letters also request, among other changes, that an  
          amendment expand OPC program coordination to include fisheries,  
          aquaculture, and harbor stakeholders.
                                           
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