BOARD MEETING DATE: February 1, 2008
AGENDA NO. 24

PROPOSAL:

Legislative Committee  

SYNOPSIS:

The Legislative Committee held its regular meeting on Friday, January 11, 2008. The next Legislative Committee meeting is scheduled for Friday, February 8, 2008 at 8:00 a.m. in Conference Room CC8. The Committee deliberated on the following items for Board consideration:

Bill/Title	Recommended Position
Proposed Legislation on Solar Energy (Huffman)	Support in concept
AB 846 (Blakeslee) Sales and Use Taxes: Exemptions: Clean Marine Fuels	Watch and report back
Current California Bunker Fuel Tax Exemption	Watch and report back

RECOMMENDED ACTION:

Receive, file this report, and adopt positions on legislative concepts and bills specified in this letter.
 

Jane W. Carney, Chair
Legislative Committee

Background

Attendance [Attachment 1] The Legislative Committee met on January 11, 2008. Committee Member Jane Carney (Chair) was present. Committee Members Michael Antonovich, Tonia Reyes Uranga, and Dr. S. Roy Wilson were present via videoconference or teleconference.

Discussion of Proposed Legislation on Solar Energy; Increased Alternative Energy Supply and Enhanced Energy Demand Management

Mr. Abarca acknowledged the leadership of Dr. S. Roy Wilson, Board Vice Chair, for focusing on the need for incentives to install solar power systems. Assembly Member Jared Huffman will introduce legislation to accomplish the following:

1. Delete current state law provisions that discourage customers from installing solar power systems that generate more electricity than needed at their location.
2. Require utilities to buy the excess power generated from a customer’s solar power system.
3. Require the California Public Utilities Commission to develop a rate that a local utility would be required to pay for excess solar power (also known as a feed-in tariff).
4. Determine the ownership rights of the renewable energy credits that are generated anytime new renewable power system is built.

The solar power industry is hoping to introduce similar legislation in the Senate. Dr. Barry Wallerstein, Executive Officer, added that Will Gonzalez, AQMD’s lobbyist, is also a lobbyist for the solar power industry and is advocating such legislation. Dr. Wallerstein explained that Mr. Gonzalez is uniquely situated to keep the Committee informed, but should the legislation take a direction not consistent with the AQMD position, Senator Polanco would represent the AQMD on these matters.

Supervisor Wilson reiterated the need for the bill and noted the Inland Empire’s potential to generate large amounts of extra clean power for the grid.

Dr. Wallerstein mentioned that the different treatment of municipal utility companies versus investor-owned utility companies would be discussed during the legislative process.

The Legislative Committee approved to support in concept the solar energy proposal as currently formulated.

Discussion of Marine Bunker Fuel Exemption and Current Legislation Creating Tax Incentives for Cleaner Fuels

Philip Crabbe, Senior Public Information Specialist, presented AB 846 (Blakeslee) to the Committee. The bill provides a tax exemption for low sulfur marine fuel purchased in California.

Currently, the bill is in the Assembly Appropriations Committee. According to the Board of Equalization, the bill would cost an estimated $1.9 million annual tax revenue loss to the state plus significant administrative costs. However, while researching AB 846, it was discovered that there is an existing sales and use tax exemption for bunker fuel with an estimated tax revenue loss of $22 to $36 million. The Committee Members noted the inconsistency and questioned the policy where a comparatively large tax incentive exists for dirty fuel, but a comparatively small tax incentive proposed for clean fuels may not emerge from the legislative process.

The Legislative Committee agreed to take a watch position on AB 846 and requested staff to report back with written material on both AB 846 and the existing bunker fuel tax exemption.

Update on State Legislative Issues

Will Gonzalez, AQMD state legislative consultant, reported that the Governor released his 2008-2009 budget yesterday with an estimated $14.5 billion dollar shortfall and widespread 10% cuts across most departments. Despite the widespread cuts, air quality programs remained largely unscathed. The cuts from environmental protection funds came mostly from water resources accounts. The approximate $10.1 million subvention fund with which CARB provides local air districts with direct assistance remained intact. The California Energy Commission also received $101 million through AB 118 for alternative fuel vehicles and technology.

The Legislature will now introduce its budget reflective of its own priorities. The Committee Members noted the need for continued advocacy for the AQMD’s environmental protection programs with the Governor’s office and the Legislature.

Update on Federal Legislative Issues

Chair Carney encouraged Board Members to participate in an upcoming trip to Washington, D.C. in support of the District’s legislative priorities.

Mr. Kadesh reported that the U.S. Senate Committee on Environment and Public Works (EPW) did not have a second markup on S. 1499 (Boxer and Feinstein), but he anticipates that the bill will move out of committee sometime after it reconvenes on January 22, 2008. Obtaining out-of-state cosponsors in the House is in process. Mr. Kadesh will continue to report about the locomotive bill in February after the legislative meetings at the end of this month.

Public Comments

Rita Fernandez-Loof of RadTech addressed the Committee on SB 587 (Runner) which was introduced last year. Ms. Fernandez-Loof reminded the Committee that the industry withdrew the bill, but informed the Committee that the concept would be reintroduced. Among other concerns, the Committee previously noted that the industry did not have quantitative verification of the volatile organic compound (VOC) content in the very low VOC materials. Ms. Fernandez-Loof informed the Committee that, in response, 3M and RadTech formed a committee of 25 companies to address the issue about the calculation method and that AQMD staff has already been notified.

Legislative Report from AQMD Home Rule Advisory Group Committee [Attachment 2]

Please refer to Attachment 2 for a written report.

Attachments (EXE 80 KB)

1. Attendance Roster
2. Legislative Report from AQMD Home Rule Advisory Group