SUNDAY IS “SIGN/VETO” DEADLINE

Sunday is the last day for Governor Schwarzenegger to act upon the hundreds of measures sitting on his desk from the 2007 legislative year. In January we reported that more than five hundred (500) bills that would have some impact on the commercial, industrial, and retail real estate industry, if enacted, had been introduced. One hundred and ten (110) of those eventually found their way to the Governor. On bills we opposed, we were able to resolve most issues through the legislative process. However, we are watching very closely for action on several bills that we have requested vetoes, and will keep you posted.

GOVERNOR SIGNS PACAKAGE OF ENERGY RELATED LEGISLATION

The Governor has signed a package of legislation dealing with energy efficiency, conservation and pollution reduction. Our industry had some concerns with a few of these measures, but we were able to successfully work with the authors to resolve issues during the legislative process. The following bills were signed into law:

• AB 662 (Ruskin; D-Redwood City) expands the authority of the California Energy Commission to set water efficiency standards for appliances.

• AB 1103 (Saldaña; D-San Diego) requires electric utilities to maintain records of energy consumption data for all nonresidential buildings to which they provide service and requires building owners or operators to provide benchmarking data to prospective buyers, lessees or lenders beginning January 1, 2010.

• AB 1109 (Huffman; D-San Rafael) enacts the California Lighting Efficiency and Toxics Reduction Act which prohibits the manufacturing for sale or the sale of certain general purpose lights that contain hazardous substances. In addition, the bill requires the California Energy Commission to adopt energy efficiency standards for all general purpose lights.

• AB 1406 (Huffman; D-San Rafael) adds condominiums to the meaning of "structure" with respect to the use of recycled water for toilet and urinal flushing.

• AB 1470 (Huffman; D-San Rafael) creates the Solar Water Heating and Efficiency Act of 2007 which provides incentives to attain the goal of installing 200,000 solar water heating systems in the state by 2017.

• AB 1481 (De La Torre; D-South Gate) creates a uniform, statewide permitting process for landscape irrigation uses of recycled water, such as parks, playgrounds and golf courses, by requiring the State Water Resources Control Board to adopt a statewide general water quality permit.

• AB 1560 (Huffman; D-San Rafael) requires the California Energy Commission to incorporate standards for water efficiency and conservation into the existing building standards governing energy efficiency.

GREEN IS GOOD AND CALIFORNIA LEADS THE REST OF THE NATION

The Governor has made energy efficiency and protecting the environment a top priority in his administration. In December 2004, he signed Executive Order S-20-04 creating his “Green Building Initiative,” calling for the state to lead the way in designing, operating and re-engineering its buildings to make them the most resource-efficient, energy-efficient and healthful public buildings in the nation.

To achieve his ambitious goals, Governor Schwarzenegger created the Green Action Team, a Cabinet-level group working to implement the Green Building Initiative. Led by State and Consumer Services Agency Secretary Rosario Marin, the team’s goal is to oversee and direct the State’s efforts. The Green Building Initiative will reduce carbon emissions by 500,000 metric tons by 2010 and 1.8 million metric tons by 2020.

The Executive Order calls for the State to reduce its electricity demand by 10 percent by 2010 and by 20 percent by 2015. California is also actively working to deploy fuel cell, wind and biomass solutions.

So far, nine California state government buildings, with more than 2 million sq. feet, are Leadership in Energy and Environmental Design (LEED) certified through the U.S. Green Building Standard. More than 100 buildings (5 million sq. ft.) are currently planned and budgeted for LEED Silver certification.

All new, renovated and built-to-suit leased state buildings will meet LEED standards. California is also making substantial upgrades to the state’s older buildings to reduce their energy use by replacing HVAC system, installing new lighting and other improvements.

Last year, Governor Schwarzenegger signed legislation to complete his Million Solar Roofs Plan to provide 3,000 megawatts of additional clean energy and reduce the output of greenhouse gases by 3 million tons, equivalent to taking one million cars off the road. The $2.9 billion incentive plan for homeowners and building owners who install solar electric systems will lead to one million solar roofs in California by the year 2018.

GOVERNOR SIGNS PACKAGE OF FLOOD LEGISLATION

The Governor has signed a package of legislation intended to strengthen flood protections in California. The legislation calls for the development of a comprehensive Central Valley Flood Protection Plan, reformation of the Reclamation Board, requires cities and counties to increase consideration of flood risks when making land-use decisions, and creates a new standard in flood protection for urban development. The business community had great concerns with these bills as they made their way through the legislative process, but we were able to secure significant amendments which mitigated many of the issues. The following bills have been signed into law:

• AB 156 (Laird; D-Santa Cruz) – Changes various provisions of the Water Code related to operation of the state-federal flood control projects in the Central Valley.

• SB 5 (Machado; D-Linden) – Requires the Department of Water Resources and the Central Valley Flood Protection Board to prepare and adopt a Central Valley Flood Protection Plan by 2012, and establishes flood protection requirements for local land-use decisions consistent with the Central Valley Protection Plan.

• AB 162 (Wolk; D-Davis) - Requires cities and counties to address flood-related matters in the land use, conservation, safety, and housing elements of their general plans.

• SB 17 (Florez; D-Shafter) – Reforms and renames the Reclamation Board to improve proficiency, and requires development of State Plan of Flood Control for the Central Valley.

• AB 70 (Jones; D-Sacramento) – Provides, generally, that a city or county may be required to contribute a fair and reasonable share of the increased flood liability caused by its unreasonable approval of developments following the failure of a state flood control project.

When signing the bills, the Governor re-stated his commitment to doing everything necessary to rebuild our aging levee system to protect against floods that could harm communities, agriculture and water supplies.

SPECIAL SESSION ON WATER RUNS AGROUND

After just two hearings, the Special Legislative Session aimed at placing Water Bond on the February 2008 ballot already seems to be over, with lawmakers unable to reach a compromise.

The Governor’s legislative plan -- which would have put a $9.1 billion bond measure on the Feb 2008 ballot -- was defeated Monday by the Senate Natural Resources and Water Committee, which instead passed a measure backed by Senate pro tem Don Perata (D-Oakland), which ultimately failed to garner enough votes on the Senate Floor.

The major disagreement boils down to the inclusion of off-stream storage or not. Without a legislative agreement, voters might be faced with two separate measures on the November 2008 ballot-- a Schwarzenegger-backed plan that emphasizes storage and a Perata plan that does not.

Everybody agrees that our state is in a major crisis when it comes to water issues – levee safety, storage, conveyance, and supply. Despite this fact, our policymakers in Sacramento have been unable to agree to a course of action. However, all hope is not lost. Behind the scenes, negotiations are continuing and we hope that a compromise plan that increases storage, improves conveyance, and promotes projects that enhance the environment will be agreed upon and presented to the voters in 2008.

SPECIAL SESSION ON HEALTH LIMPS ALONG

“Stalled,” is the way one Capitol Insider describes talks related to reforming California’s health care system. In an effort to get the talks moving once again, the Governor held a press conference this week to release details about the latest iteration of his plan. However, reports in the hallways of the Capitol are that drafts of this very plan are what made the Governor and Democratic leaders drift away from talks last week. Part of the new financing idea involves re-configuration of the California State Lottery in order to re-direct some of that revenue to pay for health coverage. The idea shows how the Governor is “thinking outside the box” to fix this issue, but could described as “complicated” at best. Click here for more detail on the Governor’s health plan.

LIEUTENANT GOVERNOR WILL CLOSE STRATEGIC ISSUES CONFERENCE

California Lieutenant Governor John Garamendi has agreed to be the closing speaker at the Strategic Issues Conference 2007; Global Warming and the Business of Real Estate. Garamendi, who is a former State Assemblymember, State Senator, Clinton Administration Official, and the State’s first elected Insurance Commissioner, is California’s 46th Lt. Governor.

As Chair of the California Commission for Economic Development, Garamendi has focused on exploring initiatives that allow California to harness the full economic and environmental benefits of developing green industries and a new sustainable growth economy and has encouraged business and government representatives to work in close cooperation to develop innovative climate change solutions. He recently stated, "California is leading the way in the fight against global climate change through its efforts to implement AB 32…. Our state has the potential to reap extraordinary benefits if our public and private sectors can successfully work in partnership to meet this challenge."

We look forward to a dialogue with the Lt. Governor at the Conference in November (see below).

STRATEGIC ISSUES CONFERENCE: GLOBAL WARMING AND THE BUSINESS OF REAL ESTATE

****PLEASE NOTE: Due to the popularity of this conference The Meritage is SOLD OUT of rooms on Nov. 1. However, there are a limited number of spaces available for the conference itself if you would still like to register.

Four major industry groups are combining forces to sponsor a high level discussion regarding the impacts of “global warming” policy on our industry. From AB 32 greenhouse gas regulations to the legislative focus on “green building” mandates, this conference promises to deliver the most up to date thinking about the politics driving these policies and will offer strategic discussion to set the course on how we can proactively be at the table and positively influence policy.

Click here to see the Strategic Issues Conference Website.

Joint sponsors for this event include: California Business Properties Association (CBPA), California Building Industry Association (CBIA), Building Owners and Managers Association of California (BOMA California), and Retail Industry Leaders Association (RILA),

The event will be held November 1-2, 2007, at the Meritage Resort in Napa Valley. A stellar line-up of policy and decision-makers from Industry, the Schwarzenegger Administration and Lt. Governor John Garamendi, as well as a respected member of the political press corps, is coalescing for the conference.

Don’t just react – be a leader – participate in this conference and shape important issues that will affect your businesses.

BOMA CALENDAR 2007/2008

November 1 & 2 – BOMA Cal/CBIA/CBPA Fall Joint Legislative Conference
BOMA Cal Annual Meeting
Napa Valley (Meritage Resort)

January 15 – BOMA Cal Board Meeting
Los Angeles
In conjunction with IREM/BOMA GLA Forecast Breakfast

March/April (date TBD) – BOMA Cal Board Meeting
Location TBD

June 10-11 – CA Commercial Real Estate Summit – BOMA Cal Board Meeting
Sacramento (Hyatt Regency)

October/November (date TBD) - BOMA Cal Annual Meeting/20th Anniversary Event
Location TBD