(a) For purposes of this section, the following terms have the following meanings:

1. (1) “Department” means the Department of Food and Agriculture.
2. (2) “Commission” means the Public Utilities Commission.
3. (3) “Energy commission” means the State Energy Resources Conservation and Development Commission.
4. (4) “Strategy” means the strategy to reduce short-lived climate pollutants developed pursuant to Section 39730.

(b)

1. (1) The state board, in consultation with the department, shall adopt regulations to reduce methane emissions from livestock manure management operations and dairy manure management operations, consistent with this section and the strategy, by up to 40 percent below the dairy sector’s and livestock sector’s 2013 levels by 2030.

2. (2) Prior to adopting regulations pursuant to paragraph (1), the state board shall do all of the following:

   1. (A) Work with stakeholders to identify and address technical, market, regulatory, and other challenges and barriers to the development of dairy methane emissions reduction projects. The group of stakeholders shall include a broad range of stakeholders involved in the development of dairy methane reduction projects, including, but not limited to, project developers, dairy and livestock industry representatives, state and local permitting agencies, energy agency representatives, compost producers with experience composting dairy manure, environmental and conservation stakeholders, public health experts, and others with demonstrated expertise relevant to the success of dairy methane emissions reduction efforts.
   2. (B) Provide a forum for public engagement by holding at least three public meetings in geographically diverse locations throughout the state where dairy operations and livestock operations are present.

   3. (C) In consultation with the department, do both of the following:

      1. (i) Conduct or consider livestock and dairy operation research on dairy methane emissions reduction projects, including, but not limited to, scrape manure management systems, solids separation systems, and enteric fermentation.
      2. (ii) Consider developing and adopting methane emissions reduction protocols.
3. (3) The state board shall make available to the public by posting on its Internet Web site a report on the progress made in implementing paragraph (2). Pursuant to Section 9795 of the Government Code, the state board shall notify the Legislature of the report.

4. (4) Notwithstanding the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), the regulations adopted pursuant to paragraph (1) shall be implemented on or after January 1, 2024, if the state board, in consultation with the department, determines all of the following:

   1. (A) The regulations are technologically feasible.

   2. (B) The regulations are economically feasible considering milk and live cattle prices and the commitment of state, federal, and private funding, among other things, and that markets exist for the products generated by dairy manure management and livestock manure management methane emissions reduction projects, including composting, biomethane, and other products. The analysis shall include consideration of both of the following:

      1. (i) Electrical interconnection of onsite electrical generation facilities using biomethane.
      2. (ii) Access to common carrier pipelines available for the injection of digester biomethane.
   3. (C) The regulations are cost effective.
   4. (D) The regulations include provisions to minimize and mitigate potential leakage to other states or countries, as appropriate.
   5. (E) The regulations include an evaluation of the achievements made by incentive-based programs.

(d)

1. (1)

   1. (A) No later than January 1, 2018, the state board, in consultation with the commission and the energy commission, shall establish energy infrastructure development and procurement policies needed to encourage dairy biomethane projects to meet the goal identified pursuant to paragraph (1) of subdivision (b).
   2. (B) The state board shall develop a pilot financial mechanism to reduce the economic uncertainty associated with the value of environmental credits, including credits pursuant to the Low-Carbon Fuel Standard regulations (Subarticle 7 (commencing with Section 95480) of Title 17 of the California Code of Regulations) from dairy-related projects producing low-carbon transportation fuels. The state board shall make recommendations to the Legislature for expanding this mechanism to other sources of biogas.
2. (2) No later than January 1, 2018, the commission, in consultation with the state board and the department, shall direct gas corporations to implement not less than five dairy biomethane pilot projects to demonstrate interconnection to the common carrier pipeline system. For the purposes of these pilot projects, gas corporations may recover in rates the reasonable cost of pipeline infrastructure developed pursuant to the pilot projects.