In This Issue:

• SPLIT-ROLL TAX WON'T SOLVE BUDGET DEFICIT

• BILLS, BILLS, AND MORE BILLS

• CALIFORNIA LEGISLATIVE LEADERSHIP; QUESTIONS RESOLVED

• CARBON EMMISSIONS > GREEN INITIATIVES > BUILDING CODES > LEGISLATION > UGGGH!

• ZERO-NET ENERGY – EVERY BUILDING A MINI-UTILITY?

• UC BERKELEY RESEARCHER CASTS DOUBT

• SENATE DEMOCRATS TO GOVERNOR: NO DELTA CONVEYANCE

• ARB APPROVES FUNDING TARGETS FOR $1 BILLION FROM PROPOSITION 1B

• HOUSE PASSES BILL TO EXTEND FEDERAL SOLAR TAX CREDIT

• ICSC STRATEGIC LEADERSHIP SUMMIT MARCH 4-5

• UPCOMING EVENT: GREEN CALIFORNIA SUMMIT AND EXPOSITION APRIL 7-9

• UPCOMING EVENT: ICSC GREENTALK; RETAIL REAL ESTATE SUSTAINABILITY Q&A

• 2008 CBPA CALENDAR

SPLIT-ROLL TAX WON'T SOLVE BUDGET DEFICIT

Assemblymember Rick Keene (R – Chico) is leading the growing chorus of concern regarding indications that members of the California State Legislature are seriously considering reviving the thoroughly discredited notion of dumping the protections provided in Proposition 13 and attempting a split-roll property tax. Anyone who has objectively looked at this idea has reached the same conclusion that penalizing a non-residential property owner simply for existing would be very detrimental to the state’s economy.

Assembly Speaker Fabian Núñez recently unveiled what he called a "fair" and "conservative" plan to tackle the state's $14.5 billion budget deficit (recently revised to $16 billion) in proposing a new split-roll property tax. A split-roll would increase the taxes paid by every California business on the property it owns, to the tune of $3 billion and $7 billion annually. Make no mistake, a split-roll would devastate California's economy.

Read the whole Op/Ed by clicking here.

BILLS, BILLS, AND MORE BILLS

Before the 5 p.m. legislative deadline last Friday, lawmakers were busy getting bills introduced. In total, not counting non-binding resolutions, the California State Legislature has introduced 4,690 separate pieces of legislation during this session.

Yes, you read that correctly; 4,690 proposals for new laws have been introduced, and with a $16 billion state budget deficit, most of them looking at your checkbook to fund programs that will most likely hurt your business.

CALIFORNIA LEGISLATIVE LEADERSHIP; QUESTIONS RESOLVED

The California State Assembly has elected Karen Bass, a Los Angeles Democrat, as the first African American woman to be speaker of the state Assembly. Bass secured votes through the help of outgoing Speaker Fabian Nunez (D-Los Angeles) and when Assemblymember Fiona Ma (D-San Francisco) dropped out Bass was able to unify the Women’s Caucus vote. The new legislative leadership in the California State Legislature:

** ASSEMBLY LEADERSHIP
Karen Bass (D-Los Angeles) is the Assembly Speaker.
Mike Villines (R-Fresno) is the Assembly Republican Leader.

** SENATE LEADERSHIP
Darrell Steinberg (D-Sacramento) is the Senate President pro Tem.
Dave Cogdill (R-Clovis) is the Senate Republican Leader.

CBPA looks forward to working with these members in their new leadership capacities.

CARBON EMMISSIONS > GREEN INITIATIVES > BUILDING CODES > LEGISLATION > UGGGH!

In California, our industry is seeing the convergence of several different policy issues that have the potential to impact our industry for the next generation. Overall, driven by AB 32 California’s landmark “Global Warming Solutions Act,” the legislators and regulatory policymakers are falling all over each other trying to “out green” one another. Since the state is $16 billion in debt, all these great ideas will be paid for by private industry through unreasonable mandates. And, no, it doesn’t give us any solace that whatever happens here will eventually spread to other states.

Carbon Emission Regulation – California’s Air Resource Board staff is currently writing the regulations that will set our “1990 Carbon Emissions Baseline” which will prescribe our industry “targets” which will dictate how we develop in this state and impact our ability to participate in any market-based carbon trading programs . This baseline will be used as the basis to set all future regulatory actions and we believe that it is extremely important to make sure this is set correctly. CBPA is in the process of building an industry-wide coalition to financially support a study to help regulators accurately benchmark our baseline and to assure we have representation during the regulatory proceedings.

Green Building Codes Process – The California Building Standards Commission (BSC) is on a record setting pace to write and implement a state based “Green Building Code.” Although the process was started less than three months ago, we are through with the “advisory” phase. In early-March we can expect 45-Day language with comments due by the end of April. Adoption of the final codes is expected as early as the July BSC meeting.

Public Utilities Commission and Energy Commission – Both entities are working on Energy Efficiency Measures policies that are intended to be adopted into the state building code (above and beyond the Green Building Codes). The PUC has already passed, and the CEC is considering a policy that would state all commercial buildings MUST be zero-net energy by 2030.

Legislature – As of last Friday, 1,000 new bills have been introduced. CBPA has identified more than 20 bills that will have a major impact on green building, carbon emission, and energy regulation. One would mandate the zero-net energy policy through statute. This is particularly bad because it would skip the building codes process and could be forced on us with no economic analysis. That is just the tip of the iceberg too – with a $16B budget deficit, creative legislators and advocacy groups are seeking to meet their policy agendas by unfunded mandates on the private sector.

Although this list is not meant to scare you, we do hope it illustrates how many proposals are aimed at your business and that you take this as a call to action to make sure your company is actively involved in the political process.

ZERO-NET ENERGY – EVERY BUILDING A MINI-UTILITY?

Two zero-net energy bills have been introduced in the California State Legislature. CBPA is trying to gather some thoughts about the proposal to help shape our industry-wide response. Here is some basic information:

* AB 2030 (Lieu) and AB 2112 (Saldana) Mandate Zero Net Energy buildings for all new construction (residential by 2020 and commercial by 2030)
* Each bill will be amended so one will deal strictly with Commercial (AB 2030) and the other strictly with residential (AB 2112).
* Basically these bills require that 50% of a building's energy be generated onsite through a “sustainable” technology.
* These bills mirror a non-binding decision made by the CPUC last year.
* However, the CPUC decision would have to go through the BSC process, which must consider economic and “feasibility” factors, to become code.

These bills seem to be de facto mandates for PV Solar as that seems the only technology that is remotely feasible. However, there is a great cost concern with PV as the size of system that would be needed to generate power for a large commercial building would be very large and expensive. There is also concern whether evolution of the existing technology will ever be able to meet such a demand (see next item).

Just from the pragmatic viewpoint, it seems that this would be much harder to do with a twenty story office building than it would be for a two story facility, yet these bills make no distinction between building types.

Such a mandate seems to force each building to become an independent “mini-utility.” What are the landlord-tenant and management issues such a policy might create? Would a building owner be forced to suppress a high energy user’s energy intake to assure zero-net energy is achieved? What does this mean for lower income tenants? What responsibility/liability does this create if we are unable to generate the needed energy?

The proposed policy begs many questions and we hope to receive your input. It must be stated that our industry is not concerned with the use of PV or other alternate forms of energy. We are embracing the technology and helping it to be pushed forward. However, such an extreme mandate does raise legitimate questions about the viability of meeting policy goals with a finishing line at the vanishing point.

UC BERKELEY RESEARCHER CASTS DOUBT

New questions have been raised as to whether or not PhotoVoltaic technology can meet all the demands that the industry is promising and that policymakers are demanding of it. The University of California Berkeley has recently released a study stating that solar power is a “loser” and undergirds the argument that PV is not a solution in the near future to provide the type of power that would be required to make a large building zero-net energy. Click here to read the report.

SENATE DEMOCRATS TO GOVERNOR: NO DELTA CONVEYANCE

The three state Senators who have lead Democratic negotiations with Republicans over a potential new water bond sent the Governor a letter asking him to hold off on planning a new conveyance system in the Delta. The letter claims that the Administration’s pursuit of the project makes it “difficult to negotiate seriously” on a comprehensive new plan to meet California’s future water needs. The letter is signed by Senate President pro Tem Don Perata (D-Oakland); Senator Michael Machado (D- Linden), Chair of the Natural Resources and Water Subcommittee on Delta Resources; and Senator Darrell Steinberg (D-Sacramento), Chair of the Natural Resources and Water Committee. Click here to read the letter.

ARB APPROVES FUNDING TARGETS FOR $1 BILLION FROM PROPOSITION 1B

The California Air Resources Board (ARB) has approved implementation guidelines to distribute the overall $1 billion of Proposition 1B (Transportation Infrastructure Bond), passed by voters in 2006. Governor Schwarzenegger signed the 2007-08 budget which contains the first installment of $250 million for air quality improvement projects.

Bond monies will go to four major regions for goods movement-related projects affecting the state's trade corridors. Funding targets to each corridor are based on population, goods movement emissions and federal attainment needs to focus bond monies on the areas most heavily impacted by freight-related pollution. The ARB approved the staff recommended allocation of funds as follows:

* $550 million--Los Angeles/Inland Empire trade corridor--55%
* $250 million--Central Valley trade corridor--25%
* $140 million--Bay Area trade corridor--14%
* $60 million--San Diego/Border trade corridor--6%

The ARB also approved allocations for the $25 million early grants, funding originated by Proposition 1B. The monies for this part of the program will be distributed among the local air districts in Los Angeles/Inland Empire ($13.8M), Central Valley ($6.5M), Bay Area
($3.4M) and San Diego/Border ($1.3M). This translates into the upgrade of over 1,000 trucks through retrofit or replacement with cleaner technology. Click here to read the full announcement.

HOUSE PASSES BILL TO EXTEND FEDERAL SOLAR TAX CREDIT

The House of Representatives passed legislation to extend the federal solar tax credit. H.R. 5351, the Renewable Energy & Energy Conservation Tax Act, will create a long-term tax credit allowing investment and planning to continue as California works to meet aggressive environmental goals while leading the nation in green technology ventures. Every little bit helps!

ICSC STRATEGIC LEADERSHIP SUMMIT MARCH 4-5

The 2008 International Council of Shopping Centers (ICSC) Strategic Leadership Summit in Washington, DC is the shopping center industry’s “Day on Capitol Hill.” This meeting is an excellent opportunity for ICSC members to convey to Congress retail real estate’s legislative agenda and educate lawmakers about the economic contributions of their businesses to communities nationwide. If you are interested in attending as part of the California Delegation please contact Rex Hime. Click here for more information.

UPCOMING EVENT: GREEN CALIFORNIA SUMMIT AND EXPOSITION APRIL 7-9

Builders, property managers, developers, facilities managers and others involved in real estate should not miss the Green California Summit (April 7-9, Sacramento Convention Center). The event, guided by an Advisory Board that includes senior state officials and leaders from the real estate community, combines an exposition featuring hundreds of green products and services with seminars and training. Discover green tools that can save you money, preserve the environment and give you a competitive edge - and find out about regulations and policy that are changing the industry. For more information, click here. CBPA members get a special 20% discount – simply enter “CBPA” as a Coupon Code towards the end of the registration.

UPCOMING EVENT: ICSC GREENTALK; RETAIL REAL ESTATE SUSTAINABILITY Q&A

ICSC's Research Scholar, Jerry Yudelson, will answer your questions on green development and operations—drawing upon his expertise as a professional engineer and one of the leading authorities on green development and marketing green buildings. Find out more about the call by clicking here.

2008 CBPA CALENDAR

June 10-11: California Commercial Real Estate Summit &
CBPA Annual Meeting
Sacramento, CA
October 23: CBPA Board Meeting and CBPA Awards Dinner
The Island (formerly the Four Seasons), Newport Beach