2007 STATE BUDGET UPDATE

Fifty-six (56) days after the Constitutional Deadline for a state budget and forty-one (41) days after the start of the fiscal year the State of California still has no budget.

Senate Republicans continue to hold-out asking for a balanced budget, while the governor and legislative democrats apply pressure to try to get two of them to supply the minimum number of votes needed to pass a spending plan. The Governor is applying pressure by highlighting the impact the impass is having on businesses, vendors, and prisons, while the democrats trumpet the impact the budget is having on social services.

GREEN BUDGET ISSUE

In a year when all roads seem to lead to a “green” issue and in a new twist on the annual budget argument, Senate pro tem Don Perata held a press conference to bash the holdout republicans by enlisting “environmentalists” to complain about the attempt to address an issue in the budget relating to Attorney General Jerry Brown’s penchant for suing local governments in an attempt to enforce greenhouse gas regulations that have yet to be written.

The press conference was largely predictable posturing, however, Bill Magavern had this to say: “This gang of 14 -- all privileged white men -- is obstructing the budget.” Aside from being racist, sexist, and ageist, the statement was also ironic as the press conference mirrored the make-up of the “gang of 14”. It is yet to be seen as to whether this was helpful rhetoric…

CEQA REFORM IN THE BUDGET???

CEQA, the California Environment Quality Act, is at the heart of this environmental issue. Many local government officials are outraged that Brown is using his office as Attorney General to sue them over growth management plans that don’t include “greenhouse gas” impacts, in order to force compliance with AB 32, which is last year’s controversial law meant to reduce the amount of carbon emissions in California. However, the specific requirements on the state is to go about this (regulations) have yet to be written and aren’t even required until 2012. So progress is being stopped by state sponsored litigation when the rules that local governments need to follow are not yet written. State Senator Bob Dutton (R-Inland Empire) is leading the charge on this issue and you can read more about the issue in an article he penned by clicking here.

The San Diego Union Tribune has also editorialized on the issue calling Brown’s actions “madness” and stating that safeguards built in to AB 32 “have now been trumped by Brown's out-of-left-field decision to appoint himself de facto pollution czar – one whose edicts are enforced by the state's largest law firm.” Read the full editorial by clicking here.

NEW BUILDING CODES TAKE EFFECT JANUARY 1

The effective date of the new California Building Code is January 1, 2008, so your company should be planning now and talking with building officials about how to comply. What does this really mean especially for already designed and under construction? Last year our industry sponsored legislation that established the following language relative to the application of building codes:
Health & Safety Code 18938.5. (a) Only those building standards approved by the commission, and that are effective at the local level at the time an application for a building permit is submitted, shall apply to the plans and specifications for, and to the construction performed under, that building permit.

The “building permit application submittal date” is the key point to be gathered from the statute. However, it should also be noted that it is entirely up to the local building department to determine what constitutes “building permit application”, and this does vary from jurisdiction to jurisdiction. For example, many jurisdictions will allow a phased project that is already well under construction to continue to show compliance under the existing 2001 California Building Code, providing the models have not changed from those originally approved when the project started. That is why you should contact your local building department NOW and get a clear interpretation of how they plan to administratively implement the new 2007 California Building Code.

COMMISSION SET UP TO STUDY TAHOE FIRESTORM; RECOMMENDATIONS DUE IN MARCH

In response to the recent Angora Fire, Governor Arnold Schwarzenegger and Nevada Governor Jim Gibbons have created the California-Nevada Tahoe Basin Fire Commission. The 17-member panel will include representatives from "affected state agencies, fire agencies and the public" and is to conduct a "comprehensive review of the laws, policies and practices that affect the vulnerability of the Tahoe Basin to wildfires." Initial reports have already verified that the surrounding forest in South Lake Tahoe contained 5-10 times the amount of fuel-load that an otherwise healthy forest would have contained. Given past practice, proposals to mitigate excessive levels of fuel load will be strongly opposed by the environmental sector. A report and recommendations are due March 21, 2008, and the commission is to disband 60 days thereafter. Kate Dargan (State Fire Marshall) would serve as the Co-Chair and Ruben Grijalva (California Department of Forestry Director) would also sit on the New Commission.

SALES AND USE TAX SIMPLIFICATION EFFORT

Federal legislation has been introduces that will help brick and mortar companies make the case for a reasonable internet sales tax policy. Representative Delahunt (D-MA), together with Reps LaHood (R-IL) and Bachus (R-AL), have introduced H.R. 3396, a bill to promote simplification and fairness in the administration and collection of sales and use taxes. However, as we move into the Fall, Congress will also be considering how to handle the expiration of the moratorium on internet access taxes and we need to be careful not to allow opponents of a fair internet tax policy to muddy the waters between the two issues during that debate. We will keep you posted as the issues move forward.

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

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 Legislature, as well as a respected member of the political press corps, is coalescing for the conference. Until we can announce confirmed names of speakers, here is the framework agenda:

THURSDAY, NOVEMBER 1, 2007
4:00 p.m. – 6:00 p.m. Kick-off Reception in the Wine Caves
6:00 p.m. – 8:30 p.m. Dinner with Special Guest Speaker

FRIDAY, NOVEMBER 2, 2007
8:00 a.m. – 9:00 a.m. Breakfast with Special Guest Speaker
9:00 a.m. – 11:30 a.m. Panel Presentations
* Building Green/Green Building Policies
* CEQA / AB 32
11:30 a.m. – 1:00 p.m. Luncheon with Special Guest Speaker

For early-bird registration information and special room rates, please contact Tracy Fujii at CBPA, 916-443-4676, or tfujii@cbpa.com.

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