BILL ANALYSIS �
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| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2013-2014 Regular Session |
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BILL NO: SB 1268 HEARING DATE: April 8, 2014
AUTHOR: Beall URGENCY: No
VERSION: February 21, 2014 CONSULTANT: Katharine Moore
DUAL REFERRAL: Environmental QualityFISCAL: Yes
SUBJECT: Natural Resources Climate Improvement Program.
BACKGROUND AND EXISTING LAW
1.The Secretary of the Natural Resources Agency (agency) is a
member of the state's Climate Action Team as well as several
directors of the departments within the agency. Additionally,
the agency, in coordination with other state agencies, leads
efforts to update the state's Climate Adaptation Strategy.
2.The California Air Resources Board's (board's) mission is "to
promote and protect public health, welfare and ecological
resources through the effective and efficient reduction of air
pollutants while recognizing and considering the effects on
the economy of the state," and one of its major goals is to
reduce the state's emission of greenhouse gases.
3.The California Global Warming Solutions Act of 2006 (act)(AB
32, Pavley/Nunez, c. 488, Statutes of 2006) set the goal of
reducing the state's greenhouse gas emissions to 1990 levels
by 2020. The board was required to develop a scoping plan to
describe how the emissions targets will be achieved. One of
the methods used to achieve the greenhouse gas (GHG) emissions
reductions is through the market-based mechanism where GHG
emissions allowances are auctioned off. Revenues from the
auctions must be used to reduce GHG emissions, and the
proceeds, with specified exceptions, collected by the board
must be deposited in the Greenhouse Gas Reduction Fund (fund).
Moneys in the fund are available for appropriation by the
Legislature.
4.AB 1532 (P�rez, c. 807, Statutes of 2012) requires that the
fund be used for specified purposes to further the act's
regulatory purposes including the reduction of greenhouse gas
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emissions to the benefit of disadvantaged communities,
providing opportunities for public and private entities to
benefit from statewide efforts to reduce greenhouse gas
emissions, and by funding natural resources-related
conservation efforts, among other provisions.
5.SB 535 (De Le�n, c. 535, Statutes of 2012) sets minimum
requirements for funding for projects in disadvantaged
communities (10%) and projects that benefit disadvantaged
communities (25%) paid for through the fund, among other
provisions.
6.According to the board, forests (including woodlands and urban
forests) rangelands (including shrublands and grasslands), and
wetlands total approximately 75% of the state's land area.
Natural ecosystem processes influence whether these natural
and working lands are a source or a sink of GHG emissions.
There is potential for these lands to reduce GHG emissions and
sequester carbon in a significant way. The board believes
this will be necessary for the state to reach its long-term
climate goals.
7.The first update to the AB 32 scoping plan calls for the board
to convene stakeholders' groups, in cooperation with the
agency, to develop a Forest Carbon Plan and also to identify
where further research is needed to understand the how natural
and working lands sequester carbon and reduce GHG emissions.
Forestry and urban forestry currently have offset protocol
developed, and others involving working lands are in
development.
PROPOSED LAW
This bill would establish the Natural Resources Climate
Improvement Program (Program) to be administrated by the board,
in coordination with the agency, to develop and implement
certain natural resources projects that maximize GHG emission
reductions or sequestration. These projects would be funded by
auction revenues from the fund. Specifically, this bill would:
Direct the board and the agency to develop guidelines,
as specified, to implement the new program to, for example:
o promote innovative natural resources projects
protecting existing carbon sinks,
o help meet post-2020 state climate goals,
o prioritize county or regional land use GHG
emissions reduction plans,
o create jobs and environmental benefits
Direct the agency, in coordination with the board, to:
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o keep the Strategic Growth Council, the state
conservancies and the Wildlife Conservation Board
(WCB) informed, as specified, about relevant
activities
o conduct climate research
o promote implementation of the state's climate
adaptation strategy
o provide technical assistance grants to
disadvantaged communities
Direct the state conservancies and the WCB to identify,
develop and implement specific projects consistent with the
developed guidelines in order to reduce GHG emissions and
increase carbon sequestration or the potential for
sequestration. Projects with specified characteristics
shall have priority. These projects or, in some instances,
programs include:
o managing and restoring public lands,
o developing and providing incentives applicable
to natural resources on private lands,
o providing incentives for the protection of
agricultural and open space lands,
o funding for investments in projects that use
natural systems, such as forests and wetlands, to
promote greater climate resiliency,
o funding for research and development related
to the use and management of natural resources and of
methods to measure and verify associated climate
benefits, and
o encouraging the diversion of organic waste to
bioenergy and composting.
ARGUMENTS IN SUPPORT
According to the author, "[s]mart, highly leveraged investments
of the state's cap-and-trade auction revenue funds are needed to
develop projects that maximize reductions in [GHG] emissions to
ensure California meets its climate goals set forth by AB 32."
He continues that SB 1268, "seeks to address a major issue
facing the legislature this year - how to effectively expend
auction revenue that results in significant reductions of GHG
emissions. SB 1268 addresses this question in proposing that a
portion of the auction revenue proceeds be used to fund
incentives that can transform typical natural resource programs
into high-impact climate change projects" that reduce GHG
emissions and sequester carbon.
"Additionally, these projects will provide other public benefits
including, climate resilience, non-exportable jobs, and water
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and air quality protection."
ARGUMENTS IN OPPOSITION
According to the California Taxpayers Association, "[t]his bill
is inconsistent with the constitutional definitions of taxes and
fees. [?] Pending litigation calls into question the legality of
raising revenue from the cap-and-trade program. [?] Expenditures
on high-speed rail, conservation projects, environmental justice
projects, have little or no nexus to regulated parties that
purchase cap-and-trade allowances. Until pending litigation on
cap-and-trade is settled, the Legislature should avoid any
hurried investment planning."
COMMENTS
This bill is a work-in-progress . While the bill's intent is
clear, there are specific aspects of the bill in need of
clarification. The proposed Program is meant to provide a
coordinating framework for resources-related climate programs
within state government. That said, providing appropriate
specific direction on coordination between new and existing
programs and projects by the numerous entities involved that
respects and accommodates existing funding mechanisms and
statutory requirements can be complicated. The Committee may
wish to direct staff to continue working with the author's
office on developing the bill's language should this bill pass
the Committee today. Further, in the event that the bill's
contents change substantially in the future, the Committee may
wish to bring the bill back before the Committee.
This bill is double-referred to the Senate Environmental Quality
Committee . Elements of the bill subject to that Committee's
jurisdiction shall be addressed there.
Ensuring the appropriate process occurs . The bill directs the
development of new grant programs and new grant programs may be
necessary to fully implement the Program's goals. The Committee
may wish to clarify the appropriate procedures that will be
followed [Amendment 1].
Greenhouse gas reduction and carbon sequestration is not climate
adaptation . While this is a matter for the Environmental
Quality Committee, it appears that some of the program
objectives stray into areas of climate adaptation (e.g.
sea-level rise, promoting project consistency with the climate
adaptation strategy, among others) and possibly other
climate-related activities that may be decoupled from greenhouse
gas reduction and carbon sequestration. There are limitations
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on what auction revenues can be used for. While having the
Program play a broad role in climate is consistent with the
existing roles of the agency and the board, it will be important
to further clarify as the bill moves forward where auction
revenues can provide support to the Program and where they
cannot.
Overlap with current Administration activities . There is
considerable overlap between the proposed Program and the
content of the natural resources-related climate plans proposed
and in the process of being implemented by the Administration
through the budget process and under its existing authority and
legislative direction. See, for example, the Cap-and-Trade
Auction Proceeds: Investment Plan FY 2013/14 - FY 2015/16.
Characteristics of priority state conservancy and WCB projects .
These include the following:
regional implementation, high potential for replication in other
locations, the ability to leverage private or other public
funding or existing programs, potential cobenefits and
multibenefit attributes, and the consideration of geographic and
socioeconomic issues.
Related legislation
AB 2348 (Stone, 2014) is identical to this bill (before Assembly
Natural Resources Committee)
SB 511 (Lieu, 2013) would have implemented a similar proposal to
provide additional legislative direction on the distribution of
auction revenues in the natural resources area (subject matter
of the bill changed )
SUGGESTED AMENDMENTS
AMENDMENT 1
Add chapter-specific direction on the development of any
grant programs necessary to implement the program
consistent with existing law and other programs.
SUPPORT
Audubon California
The Big Sur Land Trust
Bolsa Chica Land Trust
California Association of Resource Conservation Districts
Cauchuma Resource Conservation District
Land Trust of Santa Cruz County
Marin Agricultural Land Trust
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Mountains Recreation and Conservation Authority
Peninsula Open Space Trust
Resource Conservation District of Santa Cruz County
Rural County Representatives of California
Sonoma County Agricultural Preservation and Open Space District
Tahoe Fund
OPPOSITION
California Chamber of Commerce
California Taxpayers Association
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