In This Issue:

• LEGISLATURE ADJOURNS…FOR NOW

• 2009 LEGISLATIVE SYNOPSIS

• TAX PLAN MOVES FORWARD

• NO DEAL ON WATER

• RENEWABLE PORTFOLIO STANDARD – EXECUTIVE ORDER

• SOLAR POWER BILLS

• BILLS TO EXPAND COASTAL COMMISSION POWER DEFEATED

• NORCAL CITY MANAGERS LUNCHEON

• 2009 STRATEGIC ISSUES CONFERENCE

• CBPA 2009 CALENDAR

LEGISLATURE ADJOURNS…FOR NOW

The Legislature has adjourned the 2009 Legislative Session. The institution has fallen short of meeting the top-three priorities set by its leadership – prison reform, addressing the water crisis, and increasing the state’s balance of green energy. Only one issue, green energy, passed the Chambers, but the bills were so loaded with special interest provisions that they garnered no republican votes and the governor has already announced that he will use his veto pen. Aside from these three issues, the budget deficit continues to loom large, education reform measures are being talked about, and a special session on taxation is forthcoming. With all that, many people expect the Legislature to come back soon and conduct, maybe multiple “Special Sessions.” We will keep you posted on their activity.
 

2009 LEGISLATIVE SYNOPSIS

We are all about legislative and regulatory advocacy on behalf of the industry. In 2009, we tracked more than 500 bills with a potential impact on our member companies on a broad range of issues from tax code changes and Worker’s Comp, to energy policy and green building mandates. Of those measures, we actively supported 63 measures and opposed 88. Click here for a brief synopsis of some of the bills that took up much of our time this year.

TAX PLAN MOVES FORWARD

Almost lost in the hubbub of the final week of the legislative session is the work of the Com¬mission on the 21st Century Economy – a panel of experts convened to make recommendations to the Governor and Legislature about changes in California’s tax structure. High hopes had been placed on the final product of the Commission – in fact the Governor called a special session of the Legislature for later this month to consider whatever comes out of the group. And that’s the rub. At their final meeting this week, members were not prepared to formally vote on a consensus plan to reform the tax system.

Instead a proposal is being circulated looking for sign on by a majority of the commissions. Our friends at the CalChamber report that major pieces of the plan include:

* A new business net receipts tax, phased in over five years.
* Partially flatten the personal income tax, reducing the number of brackets to two and reducing the top rate from 10.3 percent to 7.5 percent.
* Eliminate the corporate income tax.
* Eliminate the state portion of the sales and use tax.
* Large “rainy day” budget reserve.

The proposed business net receipts tax is designed to be a type of value-added tax in which companies are taxed on total receipts minus all purchases from other firms, and is drawing fire from all quarters.

Also, notably absent from the report are two controversial proposals pushed by the Commission’s Vice Chair -- a split roll property tax and an 18-cent-per-gallon gasoline tax.

The business community has consistently stated that the solution to California’s revenue problems will come only from robust economic growth and job creation. Click here to see the full alert from the CalChamber and stay tuned for what is ultimately considered in the Legislature.

NO DEAL ON WATER

After three years of drought, several blue-ribbon panels on the topic, and years of talking about policy solutions, the Legislature “ran out of time” for coming up with a bill to help resolve California’s ongoing water crisis.

In the final weeks of session, a fourteen member conference committee made up of eight Democrats and six Republican members from both Houses of the Legislature toiled publicly to come up with a bill to resolve California’s water woes. However, in the end, a bill was presented on the last night of session that just a few special interests had a hand in crafting. When the bill was presented in committee, less than five organizations showed up to provide qualified support, followed by over fifty business, agricultural, local government and environmental groups there to oppose. Although the bill passed committee, it did not have the votes for a floor vote and was shelved for the year.

We have been extremely proactive in the water debate and support the pursuit of a comprehensive strategy to address all the issues. Preserving and protecting the environment, especially the Sacramento-San Joaquin Bay Delta, are laudable goals that we can support, as long as they are balanced by a robust investment in a plan and program to improve the reliability of water supplies, conveyance of those supplies, and increasing storage.

There is still some hope for a deal this year. Capitol Weekly has a good summary of what is happening. Click here to read the story.

RENEWABLE PORTFOLIO STANDARD – EXECUTIVE ORDER

As strong supporters of the Governor’s Green Energy policies, leaders of the Commercial, Industrial, and Retail real estate industry were asked to join the Governor as he signed an Executive Order to implement the state’s 33% Renewable Portfolio Standard.

Standing with the Governor was CBPA Chairman Paul Cunha (S.D. Deacon Corporation), BOMA California President Rob Cord (Kennedy Wilson Inc.), and ICSC Northern California State Director Chuck Shaw (Fite Development). Click here to see a photo of the event.

Click here to read a news account about the Renewable Portfolio Standard and click here to read a full account of the Governor’s action on “green energy,” including the text of the newly signed executive order.

SOLAR POWER BILLS

In a related story… a trio of bills meant to encourage more production of solar energy were dealt with in the final days of session. Our industry is very supportive of finding ways of evaporating barriers to making solar energy production more feasible and profitable on our rooftops, and supported all three bills.

The first raises the amount of net metering that can be generated in a utility district to 5%, but died due to some last minute amendments that were viewed as being harmful to current solar contractors. This will only really have an impact in the PG&E territory (Bay Area and Northern California not served by a Muni) and we believe there is commitment to address this issue quickly next session. The second bill allows a company to get cash money for generating energy, not just a credit on the utility bill. And the third bill will encourage/allow large scale projects.

We are encouraging the Governor to sign both bills on his desk:

AB 560 (Skinner - D) Requires that the standard contract or tariff for net energy metering be offered on a first-come-first-served basis until the time that the total rated generating capacity used by customer-generators exceeds a specified percentage of an electric distribution utility or cooperative's peak demand.
Position: SUPPORT. Status: DEAD.

AB 920 (Huffman – D) Allow customers on a net metering rate schedule to receive a payment for excess generation at a wholesale rate. These customers have renewable projects on their homes or businesses that are sized to meet the on-site load only. But due to weather and on-site electricity consumption variances, they sometimes have generated more electricity than they use. Current law limits net metering to an annual ‘true-up’ so that the customer ‘loses’ the value of the excess generation. Some utilities roll the credit over to future years. If AB 920 is enacted, these customers will be allowed to either elect to roll over their credits or receive a payment for the excess generation.
Position: SUPPORT. Status: GOVERNOR’S DESK.

SB 32 (Negrete-McLeod) Creates a fixed price payment for generation from renewable energy projects based on the value of renewable generation (energy plus the value of GHG reduction, emissions reductions, location close to demand, relieves transmission congestion, and time of delivery coincident with times of the day/year when electricity demand is highest). Projects can be located anywhere on the local utility distribution system up to maximum project size of 3MW. By knowing the terms and the rate ahead of time, this bill will encourage entrepreneurs (building owners, property owners, 3rd parties) to build projects close to where electricity is needed, without requiring new transmission lines.
Position: SUPPORT. Status: GOVERNOR’S DESK.

BILLS TO EXPAND COASTAL COMMISSION POWER DEFEATED

Two bills that would further empower the California Coastal Commission’s ability to stymie legitimate development were both defeated in the last days of session.

AB 226 (Ruskin - D) Relates to coastal development permitting. Allows the Coastal Commission to assess penalties and keep the monies to fund further enforcement activity. Creates a “bounty hunter” provision and will further stymie legitimate development. Position: OPPOSE. Status: DEAD.

AB 291 (Saldana - D) Infringes on the right of “due process” to property owners by prohibiting acting upon an application for a coastal development permit for development on any property that is subject to an existing violation case. Position: OPPOSE. Status: DEAD.

Even companies that do not develop or manage properties within the Coastal Zone were very concerned about these bills as they would have set a precedent of giving a state regulatory agency the power to fund its activities through fines and deny approvals without a fair hearing.

NORCAL CITY MANAGERS LUNCHEON

On Thursday, October 29, NAIOP is co-sponsoring the City Managers Luncheon with Lambda Alpha International at the Dante Club in Sacramento. Eight City Managers are currently scheduled to appear and more are expected. This event will be moderated by our own Rex Hime. Sponsorship opportunities are available. See this flyer for information.
 

2009 STRATEGIC ISSUES CONFERENCE

Please join us on Nov. 5-6, as several major industry groups combine forces to sponsor a high level discussion regarding “Climate Change” policy and its impact on business in California. From AB 32 greenhouse gas regulations to the legislative and regulatory focus on land use, 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 industry can proactively be at the table and positively influence policy. Click here for registration and discounted room rates. Please contact Melissa Martinez or click here for more information.
 

CBPA 2009 CALENDAR

November 5-6, 2009
CBPA Board Meeting and
Real Estate Industry Strategic Issues Conference
Napa, CA (Meritage)