In This Issue:

• TECHNICAL ISSUES DELAYED DELIVERY

• STATE BUDGET IN CRISIS

• *** ACTION ALERT*** CEQA AND GREENHOUSE GASSES – INDUSTRY ENGAGEMENT NEEDED

• ***ACTION ALERT*** PUBLIC HEARING ON AB 32 – INDUSTRY ENGAGEMENT NEEDED

• AB 32 REGULATIONS – EXTREME ENERGY EFFICIENCY MEASURES

• AB 32 REGULATIONS - HIGHER HOUSING COSTS/TECHNOLOGICALLY IMPOSSIBLE

• AB 32 REGULATIONS - HIGHER COMMERCIAL/INDUSTRIAL BUILDING COSTS

• AB 32 REGULATIONS – NO INCENTIVES FOR EFFICIENCY

• AB 32 REGULATIONS - HIGHER ELECTRICITY COSTS

• AB 32 REGULATIONS – FUNDAMENTAL CHANGE IN LAND USE POLICY

• AB 32 REGULATIONS - HIGHER TAXES AND FEES

• AB 32 REGULATIONS - HIGHER VEHICLE COSTS

• AB 32 REGULATIONS - HIGHER FUEL COSTS

• INTEGRATED REGIONAL WATER MANAGEMENT GRANT PROGRAM

• STATE WATER BOARD ANTI-DEGRADATION POLICY

• CORPORATE WATER FOOTPRINTING CONFERENCE

• CBPA 2009 CALENDAR

TECHNICAL ISSUES DELAYED DELIVERY

Our apologies for the late arrival of the weekly newsletter. Technical issues, which have been resolved delayed delivery.

STATE BUDGET IN CRISIS

The Legislative Analyst’s Office now estimates our state’s deficit at approximately $28 billion, with another $22 billion the next year. But don’t worry… the people that led us into this crisis are holding a hearing. Reviewing the thick and multiple layers of redundant environmental laws and tax policies that make California one of the worst business climates in the nation, however, is not on the agenda. Click here to read what is.
 

*** ACTION ALERT*** CEQA AND GREENHOUSE GASSES – INDUSTRY ENGAGEMENT NEEDED

As part of the AB 32 Regulatory Process the Air Resources Board (CARB) is conducting a workshop to discuss setting interim significance thresholds for Greenhouse Gases under the California Environmental Quality Act (CEQA). In other words, CARB is trying to figure out how you account for and mitigate global warming impacts your projects will induce. Some of the ideas that have been floated thus far are draconian at best and may actually be punitive and unworkable. Industry experts that understand the importance of CEQA are encouraged to provide analysis and policy suggestions to CBPA to defend against these proposals. You are also encouraged to directly participate by attending the hearing or submitting individual comments:

CEQA/AB 32 Public Workshop
December 9, 2008
2:00 – 4:00 p.m.
Cal/EPA Headquarters Building, Byron Sher Auditorium
1001 I Street
Sacramento, CA 95814

Or provide comments online by clicking here.

Comment deadline is November 26, 2008. Please provide a copy of any comments to CBPA so we can provide highly informed, unified, and coordinated testimony.
 

***ACTION ALERT*** PUBLIC HEARING ON AB 32 – INDUSTRY ENGAGEMENT NEEDED

The California Air Resources Board (CARB) is seeking public comment on the AB 32 Scoping Plan. On behalf of the commercial, industrial, and retail real estate industry, CBPA will provide verbal testimony at the November 20th hearing and has submitted comprehensive comments on the AB 32 Scoping Plan (click here to read CBPA AB 32 comments letter).

However, that is not enough! In order to assure that CARB understands the huge impact these proposed regulation will have on our industry, we need companies, chapters and local associations of professional organizations, and individual business people to weigh-in.

This may be your last chance to stop billions of dollars in new fees, taxes and higher operating costs that threaten your business.

If you are so inclined, please attend and speak on November 20th, or submit comments in writing:

Air Resources Board
1001 I Street, 2nd Floor
Byron Sher Auditorium
Sacramento, California 95814

Submit your comments in writing to by clicking here.

You do not need to write a full-blown analysis of the plan. What is most effective is for you to provide a short and simple example of how the proposed regulations will affect your business. Below are some of the broad-stroke arguments that may be helpful. Please provide a copy of any comments to CBPA so we can provide highly informed, unified, and coordinated testimony.
 

AB 32 REGULATIONS – EXTREME ENERGY EFFICIENCY MEASURES

Even though studies have shown that due to our state’s progressive building codes and energy standards a new building in California is 50% more energy efficient and emits half the greenhouse gases of the national average, AB 32 regulators are proposing extremely high energy efficiency standards above and beyond the 20% jump in energy efficiency just adopted into the state building codes. Additionally, energy standards proposed in this process will not have to meet the same economic or technological feasibility standards that such regulations currently meet. Click here to read the recent California Building Carbon Footprint Study.
 

AB 32 REGULATIONS - HIGHER HOUSING COSTS/TECHNOLOGICALLY IMPOSSIBLE

In addition to the extreme energy efficiency measures, the plan includes a Zero Net Energy (ZNE) proposal that would be difficult, if not impossible, for most commercial building types to achieve. On the residential side, a study by the National Renewable Energy Laboratory for the Sacramento Municipal Utility District, found the cost of complying with ZNE requirements was estimated to add $50,000 or more to the cost of a new home (2500 square ft.). Such an increase would have a staggering effect on the ability of families to afford a new home.
 

AB 32 REGULATIONS - HIGHER COMMERCIAL/INDUSTRIAL BUILDING COSTS

ZNE requirements are unrealistic and technologically impossible for many new commercial and industrial structures. If mandated, these facilities would be required to produce on-site power generators, which would be unjustifiably expensive. Time-of-sale retrofit requirements would worsen an already difficult real estate market. Retrofits are doubly capital intensive as they require investment for the retrofit cost and can halt or severely curb an owner’s revenue stream by rendering the building unusable during retrofit work. Additionally, we have been told that the cost for solar technology was going to become more affordable – unfortunately costs have actually risen by more than 25% in the past two years.
 

AB 32 REGULATIONS – NO INCENTIVES FOR EFFICIENCY

The AB 32 scoping plan does not provide any incentives for building owners to increase their energy efficiency or reward those companies that have already made these investments. Under the current plan, all building efficiencies that your business obtains would get credited to the utility that provides your electricity and gas. Furthermore, \CARB staff thinks that all that is needed to offset the costly mandates in the plan are the potential for “future energy savings.” We think this is unfair and does not recognize the reality of the real estate market. Therefore we are proposing a proactive plan to allow property owners that increase their energy efficiency above and beyond the baselines of the plan receive “credits” to help with the upfront capital costs of such investments. Click here to read the California Green Building Carbon Credits white paper.
 

AB 32 REGULATIONS - HIGHER ELECTRICITY COSTS

Turning on lights and air conditioning will cost more under AB 32. Businesses already have trouble affording current electricity rates now, much less the increases in bills that will come with AB 32 regs. CARB’s own Economic Analysis found that the Scoping Plan’s 33% Renewable Portfolio Standard (RPS) will increase annual electricity costs by 11% and natural gas by 8%. LA’s power costs would increase by $700 million a year, and municipal utilities in southern California expect AB 32 to increase costs by 25% to 30%.
 

AB 32 REGULATIONS – FUNDAMENTAL CHANGE IN LAND USE POLICY

Some advocacy groups are pushing long desired changes in the way California communities approve projects and development. AB 32 is being used to directly connect local land-use decisions to the global warming crisis and will mandate CEQA mitigations for those projects that are up to 30% more energy efficient than the state’s already strict Title 24 standards. The state’s Attorney General has already filed more than 70 lawsuits against local governments and projects demanding each account for global warming impacts on a project by project basis.
 

AB 32 REGULATIONS - HIGHER TAXES AND FEES

California businesses already face among the highest taxes in the country and the AB 32 Scoping Plan proposals would drive these taxes even higher. The Plan’s recommendation to ultimately require a 100% auction system for greenhouse gas emission credits could assess hidden taxes of several billion dollars a year on companies simply to continue doing business in California. The Scoping Plan also recommends imposing up to $500 million a year in new water taxes. These levies would be in addition to the tens of millions of dollars a year in fees that CARB will impose to pay for its AB 32 administrative costs.
 

AB 32 REGULATIONS - HIGHER VEHICLE COSTS

Cars and trucks will cost thousands more under AB 32. Proposed higher fuel economy standards and/or vehicle surcharges would drive up the costs of maintaining, operating and purchasing vehicles.
 

AB 32 REGULATIONS - HIGHER FUEL COSTS

Transportation fuel costs far more per gallon here than the rest of the country now. The CARB analysis found that it would cost $11 billion a year to make the fuels necessary to meet the Low Carbon Fuel Standard (LCFS), which would likely result in higher gasoline and diesel prices. In fact, based on past experience with California fuel formulation changes, consumers should expect far higher fuel costs resulting from the Scoping Plan.
 

INTEGRATED REGIONAL WATER MANAGEMENT GRANT PROGRAM

The Department of Water Resources (DWR) has scheduled a series of mid-November workshops on Propositions 84 and 1E funded Integrated Regional Water Management (IRWM) Program. The purpose of the meetings is to discuss how DWR plans to expedite both the Proposition 84 IRWM Implementation and Proposition 1E Stormwater Flood Management grant funding.

On September 30, 2008, Governor Schwarzenegger signed SBxx1, which contained appropriations for the IRWM program.

Proposition 84 -$181,791,000, of which $100,000,000 is for implementation grants
Proposition 1E -$150,000,000 for Stormwater Flood Management projects

Workshops will be held in November to open discussions with potential grant applicants on how DWR plans to award these funds. The region acceptance process will be discussed, questions will be answered, and a draft schedule will be reviewed.

Tuesday, November 18 - Riverside
Wednesday, November 19 - Sacramento
Friday, November 21 - Goleta
 

STATE WATER BOARD ANTI-DEGRADATION POLICY

The State Water Board is hosting a public meeting in Rancho Cordova this coming Monday, November 17, to discuss implementation of the state’s anti-degradation policy (Resolution 68-16). One of the drivers of this process is a petition the State Board received in July of 2007 from the Environmental Law Foundation, co-signed by several coastal environmental organizations, arguing that the State Board’s policy guidance is fatally flawed and the regional boards have failed to properly implement it and the underlying federal policy. One of the ELF recommendations is for individual and general permit renewals, which could be a disaster for the construction industry and could bring development activity in California to a halt. Click here to view the workshop notice, the policy and the State Board’s current guidance document and get involved.
 

CORPORATE WATER FOOTPRINTING CONFERENCE

How can water management help companies and your properties save energy and costs? How does water reduction drive sustainability? These are two of the central questions being answered at the Corporate Water Footprinting event which is taking place December 2-3 at the Hyatt Regency in San Francisco.

Confirmed speakers include sustainability experts from Pepsi, Coke, ConAgra Foods, Nestle Waters, IBM, Cisco, Adobe, Intel, GE, Dean Foods, Steelcase, JP Morgan and more. Water management experts from The Global Water Challenge, Business for Social Responsibility, The Pacific Institute, and the World Resources Institute are also speaking.

CBPA is supporting this event which entitles any member a discount of 20% to attend this event. Simply type “csrw20” into the discount code box when booking online or quote “csrw20” when booking by phone or fax. For more information, click here to visit the website.
 

CBPA 2009 CALENDAR

February 26, 2009
CBPA Board Meeting
California Chamber of Commerce, Sacramento

June 9-10, 2009
CBPA California Commercial Real Estate Summit &
CBPA Board Meeting
Hyatt Regency Hotel, Sacramento

November 5-6, 2009
CBPA Strategic Issues Conference
Meritage Resort, Napa