Existing law, the Cannella Environmental Farming Act of 1995, requires the Department of Food and Agriculture to establish and oversee an environmental farming program to provide incentives to farmers whose practices promote the well-being of ecosystems, air quality, and wildlife and their habitat.

This bill would declare that $50,000,000 shall be available, upon appropriation, to require the department department, upon an appropriation of moneys therefor, to establish a grant program to fund voluntary projects that increase carbon sequestration and greenhouse gas emissions reductions on working lands, as defined. The bill would require the department, in consultation with the Department of Conservation, the Department of Resources Recycling and Recovery, the State Air Resources Board, and the Department of Water Resources, to develop and adopt project solicitation and evaluation guidelines for the program, as specified.

Existing law, the Cannella Environmental Farming Act of 1995, requires the Department of Food and Agriculture to establish and oversee an environmental farming program to provide incentives to farmers whose practices promote the well-being of ecosystems, air quality, and wildlife and their habitat.

This bill would declare that $50,000,000 shall be available, upon appropriation, to the department to establish a grant program to fund voluntary projects that increase carbon sequestration and greenhouse gas emissions reductions on working lands, as defined. The bill would require the department, in consultation with the Department of Conservation, the Department of Resources Recycling and Recovery, the State Air Resources Board, and the Department of Water Resources, to develop and adopt project solicitation and evaluation guidelines for the program, as specified.

This bill would declare that $50,000,000 shall be available, upon appropriation, to the department to establish a grant program to fund projects that increase carbon sequestration in agricultural soils, improve soil water retention, and increase the resilience of and greenhouse gas emissions reductions on working lands to climate change and drought. lands, as defined. The bill would require the department, in coordination consultation with the Department of Conservation, the Department of Resources Recycling and Recovery Recovery, the State Air Resources Board, and the Department of Water Resources, to develop and adopt project solicitation and evaluation guidelines for the program, as specified.

Existing law creates the Department of Conservation and imposes powers and duties on the department with regard to resource conservation.

This bill would declare that $50,000,000 shall be available, upon appropriation, to the department to establish a grant program to fund projects that increase carbon sequestration in agricultural soils, improve soil water retention, and increase the resilience of working lands to climate change and drought. The bill would require the department, in coordination with the Department of Resources Recycling and Recovery and the Department of Water Resources, to develop and adopt project solicitation and evaluation guidelines for the program, as specified.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 761 (Levine) - Carbon sequestration: working lands

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 761 would establish a grant program at the Department of Food and Agriculture (CDFA) to fund voluntary projects that increase carbon sequestration and greenhouse gas (GHG) emission reductions on working lands.

Fiscal Impact:

• Unknown cost pressures, at least in the tens of millions of dollars, to the General Fund or the GHG Reduction Fund (special) to fund the grant program.

• Unknown initial and ongoing costs, likely in the hundreds of thousands to low millions, to the General Fund or the GHG Reduction Fund (special) to CDFA and potentially to the ARB to administer the grant program.

• Minor and absorbable costs for the Department of Conservation, the Department of Resources Recycling and Recovery, and the Department of Water Resources.

Background:

The Cannella Environmental Farming Act of 1995, requires CDFA to establish an environmental farming program to provide incentives to farmers whose practices promote the wellbeing of ecosystems, air quality, and wildlife and their habitat and requires the Secretary of CDFA to convene a five-member Scientific Advisory Panel on Environmental Farming to advise and assist federal, state, and local government agencies on issues relating to air, water, and wildlife habitat. (FAC §§561)

In his 2015-16 budget proposal, Governor Brown directed $10 million from the 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 CDFA, under its existing authority provided by the Cannella 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.

Proposed Law:

This bill would, upon appropriation by the Legislature, create a grant program to fund voluntary projects that increase carbon sequestration and GHG emission reductions on privately-owned agricultural lands, ranches, and rangelands. The bill would define carbon farming as a land management strategy that results in quantifiable GHG benefits using the US Department of Agriculture’s COMET-Planner, COMET-Farm, and other quantification tools.

Funding would be prioritized based on the extent that a project demonstrates carbon farming, sequesters carbon in agricultural soils, and achieves related co-benefits such as reducing irrigation demand, increasing yield, enhancing habitat, enhancing soil structure, among other things.

CDFA, in consultation with the Department of Conservation, the Department of Resources Recycling and Recovery, the Air Resources Board (ARB), and the Department of Water Resources, would be required to develop and adopt project solicitation and evaluation guidelines to implement the grant program. CDFA would be required to post quantified benefits of each project on its website.

Related Legislation:

SB 367 would, upon appropriation, establish a $25 million grant program, to fund projects that reduce GHG emissions and increase carbon storage in agricultural soils and woody biomass. SB 367 is currently in the Assembly Appropriations Committee.

Staff Comments:

By creating a new grant program to fund carbon farming, this bill would create cost pressures to fund a wide variety of projects. Staff assumes that these cost pressures are at least in the tens of millions of dollars based on the Governor’s budget proposal, appropriations made in earlier versions of this bill, and SB 367.

Under this bill, CDFA would incur administrative costs to create and then implement the new grant program. CDFA indicates that its costs are unknown as their costs would be dependent on the total amount allocated to the program, the number of grant applications received and awarded, and the size of the grants awarded. Staff notes that as a rough guide, administrative costs are often approximately 5% of the size of the grant program. Assuming the grant program would be in the tens of millions of dollars, administrative costs would be in the hundreds of thousands of dollars to the low millions of dollars.

To collaborate with CDFA on the development of the grant program guidelines, the Department of Conservation, the Department of Resources Recycling and Recovery, and the Department of Water Resources anticipate minor and absorbable costs.

The ARB has indicated that it anticipates significant costs associated with this bill to develop, review, and implement GHG reduction methodologies for carbon farming. While this bill references two existing methodologies to quantify emissions developed by the US Department of Agriculture (COMET-Planner and COMET-Farm), ARB believes it would need to review the tools and each of the 30 mitigation options covered by those tools for California use. ARB also anticipates costs to develop its own GHG quantification methodology. For these activities, ARB assumes it would need 6 PYs in the first year, 4 PYs in the second, and then 2 PYs ongoing for these responsibilities at a cost of $974,000, $672,000, and $390,000, respectively. Additionally, ARB estimates that it would need 2 PYs ongoing to collaborate with CDFA on development of their funding program, report on the program’s GHG emission reductions, and to evaluate disadvantaged community benefits at an additional annual cost of $350,000. These costs assume a $50 million grant program.

Staff notes that while the ARB may have some costs to collaborate with CDFA, it is unclear if these costs are duplicative of workload that would be done by CDFA. Specifically, it is not clear whether ARB needs to independently verify tools developed by the US Department of Agriculture in its entirety or develop a separate quantification tool. Presumably CDFA potentially has the expertise and the responsibility to do these verifications on their own as the administrator of the program while ARB’s role would be limited to an oversight role to assure that the assumptions made in these methodologies are consistent with other similar programs.

Staff notes that the Governor’s proposal for the Healthy Soils Initiative did not include an explicit budget change proposal for ARB costs associated with the initiative. However, ARB did receive a block of positions related to working with other agencies on GGRF expenditures and emission reduction quantification. It is unclear whether the block of positions covered the staffing needs that would be created by the Health Soils Initiative budget change proposal, but it if did, it would suggest ARB’s staffing needs associated with this bill have already been provided to the ARB. If not, staff assumes that to the extent the ARB has costs associated with the program, these costs would be offset by a reduction in CDFA’s costs so that the total administrative costs for the grant program would still be limited to approximately 5% of the grant program’s size.

This bill does not indicate a funding source. However, given the eligibility criteria established by the bill, this program could be funded by the Greenhouse Gas Reduction Fund, which receives proceeds from the cap-and-trade auctions and must be used to facilitate the achievement of GHG emission reductions consistent with AB 32 (HSC §§39710). Staff notes that there are multiple bills being considered by both houses of the Legislature that propose projects that would be eligible to receive GGRF funds. It is unclear how these bills will interact with each other. Staff notes that a discussion on the spending of GGRF is anticipated in August as part of a budget discussion.

-- END --

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2015 - 2016 Regular

Bill No: AB 761

SUBJECT: Carbon sequestration: working lands.

ANALYSIS:

Existing law:

1. Under the California Global Warming Solutions Act of 2006 (also known as AB 32), requires the California Air Resources Board (ARB) to determine the 1990 statewide greenhouse gas (GHG) emissions level and approve a statewide GHG emissions limit that is equivalent to that level, to 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 these regulations. (Health and Safety Code (HSC) §38500 et seq.)

2. 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. (Government Code §16428.8)

3. 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. (HSC §39712)

4. Under the Cannella Environmental Farming Act of 1995, requires the Department of Food and Agriculture (CDFA) to establish an environmental farming program to provide incentives to farmers whose practices promote the wellbeing of ecosystems, air quality, and wildlife and their habitat and requires the Secretary of CDFA to convene a five-member Scientific Advisory Panel (Panel) on Environmental Farming to advise and assist federal, state, and local government agencies on issues relating to air, water, and wildlife habitat. (Food and Agricultural Code §561 et seq.)

This bill:

1. Defines “carbon farming” to mean implementing a land management strategy for the purposes of reducing, sequestering, and mitigating GHG emissions on working lands.

2. Defines “working lands” to mean privately owned agricultural lands, ranches, and rangelands.

3. Requires CDFA, should funds be made available, to establish a grant program to fund projects on working lands that increase carbon sequestration and reduce GHG emissions.

4. Requires CDFA to prioritize funding for projects that provide the greatest benefit, including carbon farming and related co-benefits such as reduced irrigation demand, increased yield and resiliency, enhanced habitat and biodiversity, reduced water quality impacts, enhanced soil structure, and increased soil water holding capacity.

5. Requires CDFA, in consultation with the Department of Conservation, the Department of Resources Recycling and Recovery (CalRecycle), the state Air Resources Board, and the Department of Water Resources, to develop and adopt project solicitation and evaluation guidelines.

6. Requires CDFA to quantify the benefits of each project funded and to post this information on the department’s website.
   
   

Background

1. Agriculture and Climate Change. Farmers and ranchers are particularly sensitive to the effects of climate change as agriculture is largely dependent upon weather and the availability of natural resources. Additionally, the potential for agriculture to contribute to the mitigation of climate change by sequestering carbon and reducing GHG emissions have not been fully realized or utilized. GHG reduction and sequestration activities in the agricultural sector include reduced energy usage through more efficient watering systems, such as drip irrigation; reduced nitrogen fertilizer usage; shifting soil 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; establishing perennial vegetation on land retired from agriculture production to sequester carbon in the plants and soil, and many other practices. Many of these land management practices result in significant environmental cobenefits, such as improved water efficiency, improved air and water quality, and greater resiliency of agricultural land to climate change.

2. Marin Carbon Project. The Marin Carbon Project was designed to demonstrate on-farm practices that enhance carbon sequestration, land productivity, ecosystem functions, and mitigate climate change. One component of this project was published in 2013 by R. Ryals and W.L. Silver in Ecological Applications. This study applied half an inch of compost on grasslands in Marin County and measured carbon storage in soils over a three-year period. The authors concluded that a single application of compost resulted in greater carbon storage over time. AB 761 would fund projects that demonstrate carbon farming and sequestration; however, the use of compost is just one of several methods to achieve these goals. Others include the use of biochar, cover crops, windbreaks, irrigation practices, and reduced land tilling.

3. Healthy Soils Initiative. In his 2015-16 budget proposal, Governor Brown directed $10 million from the 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 CDFA, under its existing authority provided by the Cannella 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.

4. Statewide Waste Diversion Goals. CalRecycle is tasked with diverting at least 75% of solid waste statewide by 2020. Currently, organic materials, including green waste, make up one-third of the waste stream (approximately 11 million tons) and food waste continues to be the highest single category of disposal at over 15%. Green materials, such as lumber, cardboard, and leaves and grass comprise over 20%.

CalRecycle is also charged with implementing its Strategic Directive 6.1, which calls for reducing organic waste disposal by 50% by 2020. According to CalRecycle, significant gains in organic waste diversion (through recycling technologies for organic waste including composting and anaerobic digestion) are necessary to meet the 75% goal and to implement Strategic Directive 6.1.

As previously noted, organic waste that ends up in landfills generates landfill gas, 50% of which is methane, from the anaerobic decomposition of organic materials such as food, paper, wood, and green material. In order to address the large percentage of organic waste disposed of in landfills, AB 1826 (Chesbro, Chapter 727, Statutes of 2014) requires businesses that generate specified amounts of organics and greenwaste to arrange for recycling services of that waste.

Comments

1. Purpose of Bill. According to the author, “AB 761 establishes a framework to evaluate the potential of using best management practices on agricultural lands, ranches, and rangelands to increase carbon sequestration and water retention. Best practices may include, compost application, riparian restoration, promotion of native grasses and plants, and planting windbreaks. These efforts could be “low hanging fruit” that will go a long way toward curbing the effects of climate change and reduce water needs. Initial research shows we can remove 3 years’ worth of emissions from the atmosphere while reducing water needs by as much 25%.”

2. SB 367 (Wolk). This bill is similar to SB 367, currently in the Assembly Natural Resources Committee, in that it would create a grant program established by CDFA to fund on-farm projects that increase soil carbon sequestration and reduce GHG emissions. AB 761 would expand upon the component of SB 367 regarding on-farm projects that demonstrate soil-building and carbon-sequestration practices. Should both of these bills move forward, the bills need to be amended to harmonize terminology, definitions, and code sections to avoid confusion and conflict with the statute.

3. GGRF and the budget. AB 761 does not specify a funding source for the program, however, as the program is focused on reducing and sequestering GHG emissions, GGRF moneys may be a potential funding source.

As budget discussions on a cap-and-trade investment strategy have been pushed to later this session, an opportunity exists to have a comprehensive discussion on the universe of GGRF proposals currently in the Legislature, during budget negotiations this summer. If the Legislature feels that the program established through AB 761 is an appropriate expenditure of GGRF moneys, then this measure should also be considered through the budget process for cap-and-trade expenditures, along with all other measures proposing to expend, or authorize for expenditure, GGRF moneys.

Related/Prior Legislation

SB 367 (Wolk) of 2015, would recast and expand the membership and the duties of CDFA’s Science Advisory Panel on Environmental Farming; would appropriate $25 million from the Greenhouse Gas Reduction Fund to CDFA for the establishment of a new grant program to support on-farm practices that reduce GHG emissions and increase carbon storage in soil; and would appropriate 2% of the proceeds from this fund to the Sustainable Agricultural Lands Conservation Program for these activities. SB 367 is currently in the Assembly Natural Resources Committee.

DOUBLE REFERRAL:

This measure was heard in Senate Agriculture Committee on June 30, 2015, and passed out of committee with a vote of 3-0.

SOURCE:

Author

SUPPORT:

Audubon California

California Cattlemen’s Association

California Food Policy Council

California State Grange

California Trout

Carbon Cycle Institute

City of San Francisco, Mayor Edwin Lee

Land Trust of Santa Cruz County

Peninsula Open Space Trust

Recology

West Marin Environmental Action Committee

OPPOSITION:

None received

ARGUMENTS IN SUPPORT:

Supporters state that through carbon farming,

agricultural lands and rangelands can improve carbon capture and sequestration

while creating additional water, habitat, and economic viability benefits for

farmers and working land managers. They also note that if California hopes to

meet its ambitious GHG reduction goals, it must seek GHG reductions in all

sectors, and that California’s working lands have enormous, untapped potential for

pulling carbon out of the atmosphere and transferring it beneficially to soils and

plant material.

-- END --

SENATE COMMITTEE ON AGRICULTURE

Senator Cathleen Galgiani, Chair

2015 - 2016 Regular

Bill No: AB 761 Hearing Date: 6/30/15

Subject: Carbon sequestration: working lands.

SUMMARY

:

This bill would define “carbon farming” and “working lands” and would require the California Department of Food and Agriculture to establish, should moneys be appropriated, a grant program to fund projects on working lands that increase carbon sequestration and greenhouse gas emissions reductions.

BACKGROUND AND EXISTING LAW

:

The Cannella Environmental Farming Act of 1995 requires the California Department of Food and Agriculture (CDFA) to establish and oversee an environmental farming program that provides incentives to farmers whose practices promote the well-being of ecosystems, air quality, and wildlife and their habitat. The act also created the Scientific Advisory Panel on Environmental Farming (Science Panel) to, among other responsibilities, advise and assist government agencies on these issues by conducting scientific data reviews and approving and recommending scientifically valid data. In addition, the Science Panel is authorized to research, review, and comment on data used as the basis for proposed environmental policies and regulatory programs so that agricultural activities are accurately portrayed. The panel also identifies incentives to encourage agricultural practices with environmental benefits.

The Strategic Growth Council was created in 2008 as a cabinet-level committee tasked with coordinating the activities of member state agencies to improve air and water quality, protect natural resources and agricultural lands, increase the availability of affordable housing, promote public health, improve transportation, encourage greater infill and compact development, revitalize community and urban centers, and assist state and local entities in the planning of sustainable communities and meeting AB 32 goals. Strategic Growth Council members include representatives from the Business, Consumer Services and Housing, Natural Resources, Health and Human Services, and Environmental Protection agencies; the departments of Transportation and Food and Agriculture; the Governor’s Office of Planning and Research; and three public members.

The Affordable Housing and Sustainable Communities Program (AHSC), administered by the Strategic Growth Council, was created in 2014 to reduce greenhouse gas (GHG) emissions through projects that implement land use, housing, transportation, and agricultural land preservation practices. The AHSC program receives 20% of the annual proceeds from the Greenhouse Gas Reduction Fund to achieve these goals (SB 862 of 2014; Health and Safety Code § 39719).

The Sustainable Agricultural Lands Conservation Program (SALC) is one component of the AHSC and is implemented by the California Department of Conservation (DOC). The Strategic Growth Council is responsible for overseeing SALC and coordinating DOC with other agencies to develop program guidelines.

Guidelines for the SALC program were approved by the Strategic Growth Council on January 20, 2015, and include three major elements: 1) sustainable agricultural land strategy plans, which would provide grants to develop local strategies to ensure long-term protection of highly productive and critically threatened agricultural land; 2) agricultural conservation easements; and 3) financial incentives for adoption and use of land management practices. The guidelines specifically state that the third element is not included in the 2014 request for grant applications but will be addressed in future years.

COMET-Farm^TM is an online USDA-Natural Resources Conservation Service tool developed in partnership with Colorado State University. COMET-farm^TM, shorthand for “CarbOn Management & Emissions Tool,” was created to estimate carbon sequestration and GHG emissions on individual farms based on various factors such as soil characteristics, crop production, nutrient management, water use, and tillage practices. This tool would help farmers and ranchers calculate their farm’s potential for storing carbon in agricultural soils and reducing GHG emissions given specific land management and conservation practices.

Existing law:

1. Establishes the California Farmland Conservancy Program Act, previously known as the Agricultural Land Stewardship Program Act of 1995, to encourage voluntary, long-term private stewardship of agricultural lands by offering landowners financial incentives (Public Resources Code § 10200 et seq.).

2. Establishes the California Farmland Conservancy Program Fund for monies sourced from grants, gifts, and donations, to be used for the purchase of agricultural conservation easements, fee title acquisition grants, land improvement and planning grants, technical assistance, technology transfer, and administrative costs.

3. Requires the Department of Conservation to administer this program and review grant applications for the acquisition of agricultural conservation easements or fee title for agricultural lands.

4. Requires the CDFA, through the Cannella Environmental Farming Act of 1995, to establish and oversee an environmental farming program that provides incentives to farmers whose practices promote the well-being of ecosystems, air quality, and wildlife and their habitat.

5. Establishes the Scientific Advisory Panel on Environmental Farming (Science Panel) to, among other responsibilities, advise and assist government agencies on the above issues by conducting scientific data reviews and approving and recommending scientifically valid data.

6. Establishes in 2008 the Strategic Growth Council as a cabinet-level committee tasked with coordinating the activities of member state agencies to, among other things, improve air and water quality, protect natural resources and agricultural lands, and assist state and local entities in the planning of sustainable communities and meeting AB 32 goals.

7. Requires the state Air Resources Board (ARB), through the California Global Warming Solutions Act of 2006, to monitor and regulate sources of greenhouse gas emissions that cause global warming in order to reduce emissions of greenhouse gases. Requires ARB to determine the 1990 statewide level of GHG emissions, approve a GHG emissions limit that is equivalent to that level to be achieved by 2020, and adopt rules and regulations regarding GHG emissions reductions (AB 32 of 2006; Health and Safety Code § 38500 et seq.).

8. Authorizes ARB to utilize market-based compliance mechanisms to regulate entities subject to GHG emission limits.

9. Creates the Greenhouse Gas Reduction Fund (GGRF) to collect all monies, except for fines and penalties, from the auction or sale of GHG allowances established by the ARB market-based compliance mechanism and authorizes the legislature to appropriate monies from this fund (Government Code § 16428.8).

10. Requires that the GGRF only be used to facilitate the achievement of reductions of GHG emissions in California, as specified (Health and Safety Code § 39710 et seq.).

PROPOSED LAW

:

This bill:

1. States findings and declarations in regards to soil and vegetation management to enhance soil carbon sequestration.

2. Defines “carbon farming” to mean implementing a land management strategy for the purposes of reducing, sequestering, and mitigating GHG emissions on working lands.

3. Defines “working lands” to mean privately owned agricultural lands, ranches, and rangelands.

4. Requires CDFA, should funds be made available, to establish a grant program to fund projects on working lands that increase carbon sequestration and reduce GHG emissions.

5. Requires CDFA to prioritize funding for projects that provide the greatest benefit, including carbon farming and related co-benefits such as reduced irrigation demand, increased yield and resiliency, enhanced habitat and biodiversity, reduced water quality impacts, enhanced soil structure, and increased soil water-holding capacity.

6. Requires CDFA, in consultation with the Department of Conservation, the Department of Resources Recycling and Recovery, the state Air Resources Board, and the Department of Water Resources, to develop and adopt project solicitation and evaluation guidelines.

7. Requires CDFA to quantify the benefits of each project funded and to post this information on the department’s website.

ARGUMENTS IN SUPPORT:

According to those in support, “Carbon farming practices include compost application, riparian restoration, no-till farming, and planting windbreaks to reduce soil moisture loss, all of which help to create long-term carbon sequestration in soils and plant matter. Through carbon farming, agricultural lands and rangelands can improve carbon capture and sequestration while creating additional water, habitat, and economic viability benefits for farmers and working land managers.”

According to the California Cattlemen’s Association, “AB 761 will promote further research to determine what management practices are most effective in sequestering carbon and determine what practices are most feasible and cost effective to implement. The ongoing demand for carbon credits in both the regulatory and voluntary arena drives the need to develop more specific data relative to agriculture’s role in carbon sequestration.”

COMMENTS

:

Agriculture and Climate Change. Farmers and ranchers are uniquely sensitive to the effects of climate change as agriculture is largely dependent upon weather and the availability of natural resources. For example, the current multi-year drought has caused many farmers to fallow fields, sell livestock due to lack of available grazing, and lay off employees due to reduced workload and productivity.

The potential for agriculture to contribute to the mitigation of climate change by sequestering carbon and reducing GHG emissions is not fully realized or utilized. Plants absorb CO₂ from the atmosphere and use it to grow, produce fruits and vegetables, and to also store carbon in the soil. Animals produce manure that could be used to create energy (through methane digesters), compost, and several other valuable products, while reducing the emission of methane and other GHG. Land management practices, such as drip irrigation, reduced land tilling, nitrogen management, and the use of cover crops, have been and are continuing to be adopted to reduce negative effects on the environment.

Healthy Soils Initiative. In his 2015-16 budget proposal, Governor Brown included 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 CDFA, under its existing authority provided by the Cannella 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.

Marin Carbon Project. The Marin Carbon Project was designed to demonstrate on-farm practices that enhance carbon sequestration, land productivity, ecosystem functions, and mitigate climate change. One component of this project was published in 2013 by R. Ryals and W.L. Silver in Ecological Applications. This study applied 1.3 cm (½ inch) of compost on grasslands in Marin County and measured carbon storage in soils over a three-year period. The authors concluded that a single application of compost resulted in greater carbon storage over time. AB 761 would fund projects that demonstrate carbon farming and sequestration; however, the use of compost is just one of several methods to achieve these goals. Others include the use of biochar, cover crops, windbreaks, irrigation practices, and reduced land tilling.

SB 367(Wolk). This bill is similar to SB 367, currently in the Assembly Agriculture Committee, in that it would create a grant program established by CDFA to fund on-farm projects that increase soil carbon sequestration and reduce GHG emissions. AB 761 would expand upon the component of SB 367 regarding on-farm projects that demonstrate soil-building and carbon-sequestration practices. Should these bills move forward, the respective authors may wish to harmonize these bills to ensure that they are not in conflict, for example, using similar terminology, definitions, and adjacent code sections.

Double-referral. The Senate Rules Committee has double referred this bill to the Senate Committee on Environmental Quality as the second committee of referral. Therefore, if this measure is approved by this committee, the motion should include an action to re-refer the bill to the Senate Committee on Environmental Quality.

RELATED LEGISLATION

:

SB 367 (Wolk) of 2015, currently in the Assembly Agriculture Committee, would recast and expand the membership and the duties of CDFA’s Science Advisory Panel on Environmental Farming; would appropriate $25 million from the Greenhouse Gas Reduction Fund to CDFA for the establishment of a new grant program to support on-farm practices that reduce GHG emissions and increase carbon storage in soil; and would appropriate 2% of the proceeds from this fund to the Sustainable Agricultural Lands Conservation Program for these activities.

AB 1826 (Chesbro), Chapter 727, Statutes of 2014. Requires businesses that generate a specified amount of organic waste per week to arrange for recycling services.

SB 862 (Committee on Budget and Fiscal Review), Chapter 36, Statutes of 2014. Among other provisions, establishes the Affordable Housing and Sustainable Communities Program, administered by the Strategic Growth Council, to reduce GHG emissions through projects that implement land use, housing, transportation, and agricultural land preservation practices.

SB 732 (Steinberg), Chapter 729, Statutes of 2008. Establishes the Strategic Growth Council to coordinate member state agencies implementing projects to meet the goals of the California Global Warming Solutions Act of 2006.

AB 32 (Nunez/Pavley et al.), Chapter 488, Statutes of 2006. Establishes the California Global Warming Solutions Act of 2006. Requires ARB to monitor and regulate sources of GHG emissions that cause global warming in order to reduce emissions of GHG, as specified.

PRIOR ACTIONS

:

SUPPORT

:

Audubon California

Big Sur Land Trust

California Cattlemen’s Association

California Compost Coalition

California Farm Bureau Federation

California League of Conservation Voters

California State Grange

The California Rangeland Trust

California Trout

Californians Against Waste

Carbon Cycle Institute

City and County of San Francisco

Clean Water Action

Environmental Action Committee of West Marin

Land Trust of Santa Cruz County

Peninsula Open Space Trust

Planning and Conservation League

Recology

Santa Clara Valley Open Space Authority

OPPOSITION

:

None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 761

Author:(Levine)

As Amended Ver:June 2, 2015

Majority vote

SUMMARY: Requires, upon appropriation of funding by the Legislature, the Department of Food and Agriculture (CDFA) to establish a grant program to fund projects that increase carbon sequestration and greenhouse gas (GHG) emissions reduction on agricultural lands, ranches and rangelands. Specifically, this bill:

1. Provides that a project shall be eligible for grant funding if the project is both on working lands and assists the state in meeting its GHG emission reduction goals.

2. Requires CDFA to prioritize funding for projects that provide the greatest level of the following benefits:

   1. Demonstrate carbon farming;

   2. Sequester carbon in agricultural soils;

   3. Achieve related cobenefits such as reduced irrigation demand, increased yield, enhanced habitat, reduced water quality impacts, and enhanced soil structure.

3. Requires CDFA, in consultation with the Department of Conservation (DOC), the Department of Resources Recycling and Recovery, the State Air Resources Board (ARB), and the Department of Water Resources (DWR), to develop and adopt project solicitation and evaluation guidelines to implement the grant program.

4. Requires CDFA to quantify the benefits of each project funded and post the evaluation information on their Internet Web site.

FISCAL EFFECT: According to the Assembly Appropriations Committee:

1. Unknown cost pressures.

2. Increased initial and ongoing costs for CDFA, in the range of $2 million (unspecified fund) to develop and administer the program (based on a $50 million program).

3. Absorbable costs for the DOC, Department of Resources Recycling and Recovery, ARB, and DWR.

COMMENTS:

1. Purpose. According to the author, this bill will fund 15 to 20 pilot projects to expand the use of sustainable agricultural practices, including compost application, on rangelands and other agricultural lands. The author states research shows that these pilots are expected to increase soil carbon sequestration (reduce greenhouse gasses), improve soil water retention, and make agricultural land more resilient to climate change and drought.

2. Is this just about compost? The Marin Carbon Project began as a compost experiment seven years ago on a Marin County ranch. This experiment uncovered a way to remove carbon dioxide from the air through application of compost on rangeland soil. The project hopes to turn the rangelands of California into a tool to meet the state’s GHG reduction goals. These experiments on the grazing lands in Marin County and the Sierra Foothills of Yuba County by University of California (UC) Berkeley bio-geochemist Whendee Silver showed that a one-time application of compost substantially boosted the soil's carbon storage. The effect has persisted over six years, and Silver believes the carbon will remain stored for at least several decades. Last year, the Governor signed AB 1826 (Chesbro), Chapter 727, Statutes of 2014, which required generators of specified amounts of organic waste to arrange recycling services for the organic waste material. As the state diverts more organic waste from landfills, much of the organic waste could be turned into compost. The Marin Carbon Project with the help of UC Berkeley has demonstrated the benefits of compost application on rangelands. Compost can also be used on croplands and home gardens. The state has a role in developing markets for compost and collecting data on the benefits of it uses.

This bill creates a grant program that will fund projects that increase carbon in soils through compost application, yet the supporters have identified other practices that they wish be included in the grant program. These practices include tillage management, nutrient management, windbreaks, specific plantings, habitat enhancement, and other improved management practices, which they believe will increase carbon sequestration and reduce GHG emissions. Therefore, the grant program created by this bill will look for projects on working lands that help the state meet its GHG emission goals, but those projects will not be limited to compost application and will not be limited to rangelands.

3. Healthy Soils. Increased carbon is soils produces multiple benefits, including increased water holding capacity, increased crop yields and decreased sediment erosion. The Governor's May Revision proposes to spend $20 million from AB 32 (Núñez), Chapter 488, Statues of 2006, cap and trade revenues (Greenhouse Gas Reduction Fund) to fund demonstration projects that increase carbon in soils. Recent amendments were intended to align this bill with the Governor’s initiative.

Analysis Prepared by: Michael Jarred / NAT. RES. / (916) 319-2092 FN: 0000853

Date of Hearing: May 20, 2015

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Jimmy Gomez, Chair

ABPCA Bill Id:AB 761

Author:(Levine) – As Amended Ver:April 21, 2015

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires $50 million to be available, upon appropriation by the Legislature, to the Department of Food and Agriculture (CDFA) to establish a grant program for projects that increase carbon sequestration and reduce greenhouse gas (GHG) emissions on working lands. Specifically, this bill:

1. Requires CDFA, in consultation with the Department of Conservation (DOC), CalRecyle, Air Resources Board (ARB), and the Department of Water Resources (DWR), to develop and adopt project solicitation and evaluation guidelines to implement the grant program.

2. Defines Working Lands as privately-owned agricultural lands, ranches, and rangelands.

3. Defines Carbon Farm Planning as a landscape-level conservation planning process designed to: 1) identify GHG emissions reduction, sequestration and mitigation opportunities on working lands; and 2) quantify those GHG benefits using the US Department of Agriculture’s COMET-Planner, COMET-Farm, and other quantification tools.

4. Requires CDFA to quantify the benefits of each project funded and post the evaluation information on their Internet Web site.

FISCAL EFFECT:

1. Cost pressures of $50 million (unspecified fund) to fund the grant program.

2. Increased initial and ongoing costs for CDFA, in the range of $2 million (unspecified fund) to develop and administer the program (based on a $50 million program).

3. Absorbable costs for DOC, Cal Recycle, ARB and DWR.

COMMENTS:

1. Purpose. According to the author, this bill will fund 15-20 pilot projects to expand the use of sustainable agricultural practices, including compost application, on rangelands and other agricultural lands. The author states research shows that these pilots are expected to increase soil carbon sequestration (reduce greenhouse gasses), improve soil water retention, and make agricultural land more resilient to climate change and drought.

2. Healthy Soils. Increased carbon is soils produces multiple benefits, including increased water holding capacity, increased crop yields and decreased sediment erosion.

The Governor's May Revision proposes to spend $20 million from AB 32 cap and trade revenues (Greenhouse Gas Reduction Fund) to fund demonstration projects that increase carbon in soils.

The author may wish to align this bill with the Governor's proposal.

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

Date of Hearing: April 13, 2015

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Das Williams, Chair

ABPCA Bill Id:AB 761

Author:(Levine) – As Introduced Ver:February 25, 2015

SUBJECT: Carbon farm planning

SUMMARY: Declares that $50 million shall be available, upon appropriation, to the Department of Conservation (DOC) to establish a grant program to fund projects that increase carbon sequestration in agricultural lands, ranches, and rangelands.

EXISTING LAW:

1. Creates the Division of Resource Conservation (Division) within DOC and imposes powers and duties on the Division with regard to resource conservation. Allows the Division to aid Resource Conservation Districts in developing plans for achieving their soil and water conservation objectives.

2. Requires, pursuant to the California Global Warming Solutions Act (AB 32), the Air Resources Board (ARB) to adopt a statewide greenhouse gas (GHG) emissions limit equivalent to 1990 levels by 2020 and to adopt rules and regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions.

3. Requires the Strategic Growth Council (SGC) to develop and administer the Affordable Housing and Sustainable Communities Program to reduce GHG emissions through projects that implement land use, housing, transportation, and agricultural land preservation practices to support infill and compact development and that support other related and coordinated public policy objectives.

4. Continuously appropriates to the SGC 20% of the annual proceeds of the Greenhouse Gas Reduction Fund (GGRF).

5. Phases in requirements for generators of specified amounts of organic waste to arrange recycling services for the organic waste material beginning January 1, 2016.

THIS BILL:

1. Defines “carbon farm planning” as a landscape-level conservation planning process designed to identify GHG capture and mitigation opportunities on working lands and prescribes how to quantify those GHG benefits.

2. Declares that $50 million shall be available, upon appropriation, to the DOC to establish a grant program to fund projects that increase carbon sequestration on agricultural lands, ranches, and rangelands.

3. Requires DOC in coordination with the Department of Resources, Recycling and Recovery (CalRecycle) and the Department of Water Resources (DWR) to develop and adopt project solicitation and evaluation guidelines for the grant program.

4. Requires projects to meet one or more of 10 conditions to be eligible for the grant program. Some of the conditions include projects that assist in the state meeting GHG goals, improve soil water retention, and improve the economic and ecological viability of working lands.

FISCAL EFFECT: At least $50 million from an unspecified source.

COMMENTS:

1. Author’s statement.

AB 761 establishes a $50 million carbon farming grant program to fund 15-20 pilot projects to expand the use of sustainable agricultural practices, including compost application, on rangelands and other agricultural lands. Research shows that these pilots are expected to increase soil carbon sequestration (reduce greenhouse gasses), improve soil water retention, and make agricultural land more resilient to climate change and drought.

2. Is this just about compost? The Marin Carbon Project began as a compost experiment seven years ago on a Marin County ranch. This experiment uncovered a way to remove carbon dioxide from the air through application of compost on rangeland soil. The project hopes to turn the rangelands of California into a tool to meet the state’s GHG reduction goals. These experiments on the grazing lands in Marin County and the Sierra foothills of Yuba County by UC Berkeley bio-geochemist Whendee Silver showed that a one-time application of compost substantially boosted the soil’s carbon storage. The effect has persisted over six years, and Silver believes the carbon will remain stored for at least several decades. Last year, the Governor signed AB 1826 (Chesbro), Chapter 727, Statutes of 2014, which required generators of specified amounts of organic waste to arrange recycling services for the organic waste material. As the state diverts more organic waste from landfills, much of the organic waste could be turned into compost. The Marin Carbon Project with the help of UC Berkeley has demonstrated the benefits of compost application on rangelands. Compost can also be used on croplands and home gardens. The state has a role in developing markets for compost and collecting data on the benefits of it uses. The Governor’s 2015-16 budget proposal unveiled a “Healthy Soils” initiative. The proposal stated that:

…as the leading agricultural state in the nation, it is important for California’s soils to be sustainable and resilient to climate change. Increased carbon in soils is responsible for numerous benefits including increased water holding capacity, increased crop yields and decreased sediment erosion. In the upcoming year, the Administration will work on several new initiatives to increase carbon in soil and establish long term goals for carbon levels in all California’s agricultural soils. CDFA will coordinate this initiative under its existing authority provided by the Environmental Farming Act.

AB 761 creates a grant program that will fund projects that increase carbon in soils through compost application, yet the supporters have identified other practices that they wish be included in the grant program. These practices include tillage management, nutrient management, windbreaks, specific plantings, habitat enhancement, and other improved management practices, which they believe will increase carbon sequestration and reduce GHG emissions. Therefore, the grant program created by this bill will look for projects on working lands that help the state meet its GHG emission goals, but those projects will not be limited to compost application and will not be limited to rangelands.

3. Working lands. According to ARB’s May 2014 “First Update to the Climate Change Scoping Plan” (scoping plan update), “recent research has shown that GHG emissions from urban areas are much greater than those from agricultural lands on a per-acre basis.” Also according to the scoping plan update there are many GHG emission reduction and carbon sequestration opportunities that could be realized in the agriculture sector. The scoping plan update stated that restoration and improved management practices on rangelands that increase carbon storage should be incentivized. In the scoping plan update, ARB combines rangelands with forestland and calls them working lands. ARB categorizes all other agricultural practices in a section on agriculture. AB 761, for purposes of the grant program, combines rangeland and other agricultural land together as working lands. This might be more appropriate than separating one agricultural practice from all others. The grant program would develop incentives to increase carbon sequestration and reduce GHG emissions for all different types of crop and livestock production and could help create comparisons across the industry.

4. Carbon farm planning. The bill defines carbon farm planning as a planning process that identifies GHG capture and mitigation opportunities on working lands and quantifies those benefits using the United States Department of Agriculture’s (USDA) COMET-Planner, COMET-Farm, and other quantification tools. These quantification tools were designed by the USDA in partnership with Colorado State University to help enable agricultural producers to calculate how much carbon their conservation actions can remove from the atmosphere. COMET-Planner and COMET-Farm are new tools and are currently for voluntary reductions. It is unclear whether they will mesh with how ARB will quantify reductions from carbon farm planning. Information provided by the author states that carbon farming improves carbon sequestration on agricultural and rangelands while creating additional water, habitat, and economic viability benefits for farmers and working land managers. According to the author, many carbon farming practices are not new, but if applied appropriately on rangelands and croplands can significantly enhance carbon sequestration in both vegetation and soils.

After the initial title and definition, AB 761 only uses the term carbon farm planning again once in condition 9 of the 10 possible ways projects may qualify for grants. However, condition 9 allows for similar planning processes that are not carbon farm planning. While carbon farm planning is an interesting concept, as currently drafted, it seems to serve no real purpose for the bill. It might be more appropriate to make the bill focused on GHG emission reductions and carbon sequestration on working lands while prioritizing the demonstration of carbon farm planning. The author and Committee may wish to consider amending the bill to name the Division Carbon Sequestration on Working Lands and prioritize carbon farm planning for awarding project grants.

5. Department of Conservation. DOC has received funding from SGC to administer the Sustainable Agricultural Lands Conservation program, which protects agricultural land with easements, and received funding from SGC to develop a program to assist with management of agricultural land in ways to assist California with meeting its GHG reduction goals. However, the author does not believe DOC is the most appropriate agency to administer this grant program. The author believes the California Department of Food and Agriculture (CDFA) would be the more appropriate agency to administer this grant program. CDFA has a single focus on working lands and is a member of the Climate Action Team. If CDFA was the lead agency, AB 761 would be consistent with recommendations in the scoping plan update which stated, “CDFA will strengthen technical assistance programs and associated financial incentives to help agricultural operators develop carbon plans and implement GHG emission reduction practices.” The author and Committee may wish to consider amending the bill to make CDFA the agency with the lead role administering the grant program while consulting with ARB, CalRecycle, DOC, and DWR.

6. Suggested Amendments. In addition to the other amendments suggested above the author and committee may wish consider amending the bill to:

   1. Require each project to be on working lands and assist the state in meeting its GHG emission reduction goals.

   2. Require CDFA to prioritize projects with the greatest level of benefits.

   3. Reduce the number of benefits and changes the benefits to more closely align with the intent of the bill.

   4. Require CDFA to quantify the benefits of each project awarded through the grant program and post the information on their website.

7. Opposition. The Center for Biological Diversity opposes AB 761 because it believes the bill assumes that livestock rangelands are the best possible end use of compost and would directly fund only livestock rangelands. However, the definition of working lands includes all privately owned agricultural lands. In addition, the committee amendments will broaden the type of projects eligible beyond compost and rangelands.

REGISTERED SUPPORT / OPPOSITION:

Support

Audubon California

California Cattlemen’s Association

California Trout

Carbon Cycle Institute

Environmental Action Committee of West Marin

Land Trust of Santa Cruz County

Peninsula Open Space Trust

Santa Clara Valley Open Space Authority

Opposition

Center for Biological Diversity (unless amended)

Analysis Prepared by: Michael Jarred / NAT. RES. / (916) 319-2092