| CBPA Weekly eUPDATE Another benefit of membership |
| Friday, March 7, 2008 |
In This Issue:SPLIT-ROLL PROPERTY TAX – GETTING READY FOR ACTION!A large coalition of business and industry groups and individual companies, gathered in Sacramento to discuss the renewed threat of split-roll property tax that is bearing down on us. As we have been reporting, leaders in the California State Legislature are seriously considering reviving the thoroughly discredited notion of dumping the protections provided in Proposition 13 and attempting to impose a split-roll property tax that would choke California businesses. Anyone who has objectively looked at this idea knows that Proposition 13 has made property taxes in California one of the most reliable and stable funding sources and they reach the same conclusion that penalizing non-residential property owner simply for existing would be very detrimental to the state’s economy. The group agreed to take steps to assure that we meet this bad idea with early and stiff resistance and that we make sure California policymakers are educated about the long term benefits and stability that Proposition 13 has brought to our state. Stay tuned, more news about these efforts will be forthcoming in the weeks ahead. Click here to learn more about the issue in general and to read CBPA’s policy statement. AB 1065 – 80% ENERGY REDUCTION MANDATE – TAKE ACTION NOW!In a more immediate threat to the industry, a large coalition of business and industry groups have formed a coalition to oppose AB 1065 (Lieber; Mountain View) which would mandate that all buildings (residential and non-residential) reduce their consumption of energy by 20 percent in 2015 and 80 percent no later than 2030. Yes you read that right, 80 percent! If you think this mandate would impact your business, we ask that you contact the members of the committee and ask that they “vote NO on AB 1065.” The bill will be heard in the Senate Transportation and Housing Committee on Tuesday, March 11. Below is a list of committee members and the next item has more detail about why this mandate is such bad public policy. Senate Transportation and Housing Committee Members: Call or write today to ask that they “vote NO on AB 1065.” AB 1065 – UNREASONABLE MANDATEWhat does AB 1065 do exactly? In plain English it will require that all building in the State of California reduce energy consumption by 80 percent, regardless of building type, use, or location. From the bill: (4) When compared to the standards adopted on November 5, Click here to read the full bill text. Although California companies have long been leaders in the effort to reduce energy consumption, this bill does not seem to acknowledge that fact. New commercial buildings are already 50% more efficient than the national average. And starting in June 2009 new California homes will be 50% more energy efficient than those built to national standards. AB 1065 – DEVASTATING IMPACTS ON ECONOMYWhile our industry supports increased energy efficiency and conservation goals, the aggressive mandate in AB 1065 is unrealistic, would have significant and devastating consequences to California’s already struggling housing sector, and could act as a de facto moratorium on new commercial building construction. In order to meet the aggressive energy efficiency goals set forth in this bill, every building in California – residential and non-residential -- will have to become a “mini-utility” and begin to generate its own power. On-site power generation is very expensive and has technological issues that may not allow it to produce the quantity of electricity needed in large buildings. In multi-tenant residential and commercial buildings there is very little a building owner can do to reduce tenant power usage. It is estimated that the “plug-load” of such a building can reach as high as 40%. This bill provides no incentives or tools to reduce the energy usage of people in the buildings. We are also very concerned about the impact this measure will have on housing affordability especially during this time of a down market. Gearing-up to meet the first mandate in this bill, a 20% reduction no later than 2015, is troublesome in that its ill-timing will add expenses exactly when such disincentives are least needed. The Sacramento Municipal Utility District estimates that a mandate of just 50% in a home’s energy efficiency will cost at least $20 per square foot. Not even getting to the full 80% mandate of this bill will increase the price of a new average sized home by $50,000, reducing affordable workforce housing and pricing many Californians out of the housing market altogether. The fact is that there are major technological impediments to implementing the on-site power generation requirements mandated by this measure. According to a recent University of California study, even a highly evolved and advanced PV system simply will not be able to provide the required amount of power needed for a large commercial or multi-tenant building, no matter how efficient the building is. From the pragmatic viewpoint, this policy would be much harder to accomplish in certain building types, uses, and climate zones, yet this bill has a “one-size fits all” mandate. It regulates an apartment complex in the same way it regulates an industrial complex or retail facility. A solar array on top of a 30 story urban building may well have to extend beyond the roofline in manner that is physically impossible, would probably shade neighboring buildings from their needed sunlight, and violate local building, fire, and safety codes. NEW WATER BOND LEGISLATION ANNOUNCEDState Senator Mike Machado (D - Linen) who has been one of the legislative leads on water issues announced that he is introducing a new water bond in an attempt to restart failed negotiations. The bill, SB 6XX contains $2 billion for "water supply reliability," $2.4 billion for Delta sustainability, $1.08 billion for clean water and pollution clean-up, $1.1 billion for clean beaches, groundwater protection and water quality, and $250 million for water recycling. As of press time, we are still analyzing the bill to see what it means in terms of the most critical water needs – supply, storage, and conveyance. Reaction from new Senate GOP leader Dave Cogdill (R – Fresno): "I look forward to continuing to work with Senator Machado on a new proposal that acknowledges widespread interests in funding for new water storage, both surface and groundwater, along with other sorely needed water funding. We’re ready to roll up our sleeves and work across the aisle with the goal of passing a comprehensive bond." Governor Schwarzenegger called a special session on water in 2007, but legislators could not agree on a measure. WHEN IS A “FEE” REALLY A “TAX” IN DISGUISE?Our good friends at the CalChamber attempt to answer this age-old question, "When is 'fee really a 'tax' in disguise." This year we have seen an Environmental Fee applied to all companies in the state with more than 50 employees, and there are numerous more tax/fee proposals in the pipeline to help the state balance its tiny budget problem. Click here to read this excellent and informative piece. UPCOMING EVENT: GREEN CALIFORNIA SUMMIT AND EXPOSITION APRIL 7-9Builders, 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. Click here for more information. 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 APRIL 23ICSC'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. Event is April 23, find out more about the call by clicking here. CBPA CALENDARFebruary 7, 2008 March 26, 2008 June 10-11, 2008 October 23, 2008 For more information or to learn about sponsorship on any of these events, please contact CBPA at 916-443-4676. |
California Business Properties Association
Rex Hime
President & CEO
Matthew Hargrove
Sr. VP of Governmental Affairs
1121 L Street, Suite 809 Sacramento, CA 95814
916-443-4676 ph
916-443-0938 fax
www.cbpa.com
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CBPA Affiliate Members
International Council of Shopping Centers
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Building Owners and Managers Association of California
California chapters, Institute of Real Estate Management
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