BOARD MEETING DATE: February 6, 2009
AGENDA NO. 23

REPORT:

Legislative Committee

SYNOPSIS:

The Legislative Committee held its regular meeting on Friday, January 16, 2009. The next Legislative Committee meeting is scheduled for Friday, February 13, 2009 at 8:00 a.m. in Conference Room CC8. The Committee deliberated on agenda items including the following state legislation for Board consideration:

Bill/Title	Recommended Position
AB 19 (Ruskin) Greenhouse Gas Emissions: Consumer Product Labeling	Support with amendment
AB 28 (Jeffries) Natural Gas Engines: Water Pumps	Oppose
SB 11 (Negrete-McLeod) County Employee Retirement: San Bernardino County Health Benefits.	Support
SB 31 (Pavley) California Global Warming Solutions Act of 2006: Revenue Allocations	Support
AB 46 (Blakeslee) Energy: Energy Conservation Assistance	Support
AB 64 (Krekorian) Energy: Renewable Energy Resources: Generation and Transmission	Watch
AB 21 (Lowenthal, Bonnie) Economic Poisons: Methyl Bromide	Support
SB 7 (Wiggins) Renewable Energy Sources: Net Metering	Watch
SB 17 (Padilla) Electricity: Smart Grid System	Watch
SB 32 (Negrete-McLeod) Renewable Electric Generation Facilities	Support with amendment

RECOMMENDED ACTIONS:

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

Jane W. Carney, Chair
Legislative Committee

Attendance [Attachment 1] The Legislative Committee met on January 16, 2009. Committee Chair Jane Carney was present. Committee Members Michael Antonovich and Jan Perry were present via telephone conference. Committee Members Tonia Reyes Uranga, and Dr. S. Roy Wilson were present via videoconference.

Chair Carney requested that staff distribute the agenda packages to the committee members earlier. This will allow the committee members a better opportunity to review the bill analyses thoroughly.
 

Update on State Legislative Issues

Will Gonzalez, AQMD state legislative consultant reported that the legislative leaders and the Governor have been meeting daily to finalize the budget. In terms of AQMD issues, the principal concern is the Governor’s push for CEQA exemptions on several infrastructure projects. The list that was last seen does not include any projects in the South Coast basin. If the budget is not completed by the end of February, non-essential services will stop receiving payment from the State and the State Controller has already formed a working group to figure out how to start processing IOU’s.

Dr. Barry Wallerstein, AQMD Executive Officer, commented that the list of projects Mr. Gonzalez referred to does not include any projects within our jurisdiction. However, staff is very concerned about the language that has been floating around as a matter of precedent. Dr. Wallerstein added that the board could potentially lose significant authority over certain types of equipment if the state were to set aside the fleet rules or regulations for portable engines that might be used at construction sites. Dr. Wallerstein informed the Committee that the staff would continue to watch over such items carefully.

Mr. Gonzalez reported that South Coast is interested in proposing amendments to the Prop 1B Air Quality program to ensure that if a project falls through, AQMD would be allowed a second opportunity of placing that money with another project. This is similar to what we do with the Carl Moyer Program. Assembly Member Furutani has agreed to carry that bill.

Mr. Gonzalez stated that over the last few days, most of his time in the capitol has been spent on the offset issue and an aggressive educational information campaign has been initiated. Several South Coast staff along with the lobbyists met with the South Coast delegation members regarding the New Source Review Permit Moratorium and the January 21^st stakeholders meeting. Chair Carney asked what the timeline is. Dr. Wallerstein responded that next week there will be a workshop to kick off a public process which is intended to be utilized to refine short-term and long-term fixes. Chair Carney asked if there is a written summary that is utilized to describe the offsets issue. Chair Carney also asked that the documents be posted on the AQMD website. Dr. Wallerstein committed to ensuring that the documents would be posted on the web and that the Legislative Committee Members would be sent a briefing package.

Mr. Gonzalez reported that committee chairmanships were announced this week by Speaker Bass. The appointments are as follows: the Assembly Appropriations Committee new Chair is Kevin Deleon. The Natural Resources Committee Assembly has a new chair, Nancy Skinner from Berkeley. In Assembly Transportation, Assemblymember Mike Eng from Monterey Park will be chairing the committee. Assembly Utilities and Commerce Committee will be chaired by Assemblymember Felipe Fuentes.
 

Update on Federal Legislative Issues

With regard to appropriations, Mark Kadesh, AQMD federal legislative consultant reported that the three main topics are the stimulus package, the fiscal year 2009 bills that were not passed last year, and the fiscal year 2010 bills for which submission deadlines are quickly approaching.

Mr. Chris Kierig, AQMD federal legislative consultant reported that the fiscal year 2009 bills probably won’t get done until the end of February. The fiscal year 2010 deadlines are approaching and they have been working with AQMD staff on requests to pursue fiscal year 2010 appropriations. Mr. Kierig stated that with an $825 billion stimulus bill there are many potential projects that AQMD may be able to participate in, when the bill is passed. Mr. Kierig shared that there is at least $300 million included for Diesel Emissions Reduction Act (DERA) and $200 million for transportation electrification. Mr. Kierig stated that the Department of Energy is getting $18.5 billion for innovative energy investment and the emphasis will be on energy efficiency and not air quality. Ms. Carney clarified that if a stimulus bill does pass, the monies would be available through the various federal agencies.
 

Recommend Positions on the following state bills [Attachment 2]

Mr. Oscar Abarca, Deputy Executive Officer for Public Affairs, briefed the Committee on the following bills:
 

AB 19 (Ruskin): This bill would enact the Carbon Labeling Act of 2009 which would establish a voluntary carbon labeling program to create incentives for manufacturers to reduce the carbon footprint of their products and an opportunity for consumers to choose products with smaller carbon footprints.

Staff recommended supporting the bill with an amendment. The amendment is intended to strengthen the bill by requiring an audit provision to ensure that the consumer products actually conform to the advertised marketing claims with respect to the product’s carbon footprint.
The Legislative Committee recommended to Support AB 19 with Amendments.

AB 28 (Jeffries): This bill would prohibit air pollution control districts and air quality management districts from restricting the use of engines powered by natural gas by a city, county, or special district, including a water district, to operate water pumps. Such provisions are a direct attack on AQMD Rule 1110.2 and the District’s authority to control emissions from stationary sources.

Ms. Tonia Reyes Uranga noted that the bill has no opposition on file to which Mr. Abarca explained that it was very early in the process, but that the environmentalists and other air districts would certainly come out in opposition. Dr. Wallerstein added that AB 28 wipes out the board’s authority for feasible clean engines and if enacted, the District could not insist on best available control technologies (BACT). In addition, Dr. Wallerstein noted that this bill was potentially in conflict with federal law requirements.
The Legislative Committee recommended to Oppose AB 28.
 

SB 11 (Negrete-McLeod): This bill would authorize the board of retirement of San Bernardino County to establish by resolution a fund for the collective investment of assets held in trust solely for the exclusive benefit of providing health benefits to employees of any local public agency, as specified.

Ms. Carney stated that a position on SB 11 should not be taken because it was not of direct, central concern to the agency and that getting involved would dilute AQMD’s authority. Staff clarified that the retirement fund requested that we submit a letter of support on SB 11; staff efforts would be limited to drafting a letter; and that the bill would provide the district with additional flexibility and potential cost-savings. Staff further explained that there were a number of additional issues which would require good relations with the retirement board underscoring the importance of supporting SB 11. Ms. Carney withdrew her objection.
The Legislative Committee recommended to Support SB 11.
 

SB 31 (Pavley): This bill requires that revenue collected from compliance mechanisms for AB 32 be deposited into a specific fund, and specifies the use of this revenue.

Ms. Carney asked if the Air Resources Board is allowed a certain percentage to cover its cost of administrating this program. Barbara Baird, District Counsel stated that AB 32 currently provides that the state board can adopt a schedule of fees to cover the cost of carrying out this division and that authority already exists and is similar to AQMD’s authority to adopt fees. Ms. Baird added that AB 32 recognizes that there may be other programs such as a cap and trade program with an auction of credits where funds come in but no direction has been given as to how the funds should be spent. SB 31 provides that direction consistent with the goals of the Global Warming Solutions Act of 2006.
The Legislative Committee recommended to Support SB 31.

Dr. Anupom Ganguli, Assistant Deputy Executive Officer, briefed the committee on the following bills:
 

AB 46 (Blakeslee): This bill would extend the operation of the State Energy Conservation Assistance Account, currently required to sunset in 2011, to January 1, 2015. The purpose of this account is to provide loans to schools, hospitals, public care institutions and local government entities for financing energy conservation related projects.
The Legislative Committee recommended to Support AB 46.
 

AB 64 (Krekorian): This complex bill increases California’s Renewable Portfolio Standard program; establishes a feed in tariff accessible by all small scale renewable distributed generation facility operated by any retail customer-generator; and establishes the Renewable Infrastructure Authority to build eligible renewable energy resources and electric transmission lines, to deliver the electricity generated to retail customers.

Staff originally recommended a position of support with amendments, but later discovered that the bill was very much in flux and changed its recommendation to watch. The Legislative Committee recommended to Watch AB 64.
 

AB 21 (B. Lowenthal): This bill would require the use of methyl bromide in this state to clean or fumigate a container used to transport goods to or from the state to be restricted to a manner and method of application that precludes exposure to any residential dwelling, school, day care facility, park, play area, or healthcare facility.
The Legislative Committee recommended to Support AB 21.
 

SB 7 (Wiggins): This bill would require energy producers to establish net metering rates for their customers who produce renewable energy.

Staff originally recommended a position of support, but discovered that the bill is still much in flux and that both the utility industry and the environmental community are very much split over the bill. Consequently, staff recommends a position of watch until the bill is in a more final form and passes its first committee.

Dr. Wilson said that he would support this bill as long as the District watches it carefully and not let certain interests sidetrack net metering and feed in tariffs. Dr. Wallerstein added that staff has continued to work in support of net-metering and the ability of someone who produces solar energy to be able to sell power back into the grid. At minimum, staff will return to committee in a month with a set of principles for the Committee to review and adopt that would provide direction to staff on feed in tariffs and net metering.
The Legislative Committee recommended to Watch SB 7.
 

SB 17 (Padilla): This bill would require the Public Utilities Commission (PUC), in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission) and the Independent System Operator (ISO), to determine the requirements for a smart grid deployment plan consistent with the policies set forth in the bill and federal law.

After receiving additional information this week, staff changed its initial recommendation of support to watch in view of implementation uncertainties and the discussion by industry and the environmental groups that the policies recommended in the bill may be too restrictive for a truly efficient smart grid system.
The Legislative Committee recommended to Watch SB 17.
 

SB 32 (Negrete-McLeod): This bill requires private and local publicly owned electric utilities to purchase electricity from any small-scale renewable electricity customer generators under 3 MW providing certain conditions are met.

The bill is a reintroduction by the same author, as a similar bill failed on concurrence last year due to an agricultural industry amendment; but the issue is resolved and there is support for the bill by Senate leadership as well as the Administration.Staff also recommended an amendment that would increase the caps on the statewide cumulative generating capacity obligation for investor owned utilities and municipally owned utilities of 500 and 250 megawatts (MW) to 1000 and 500 megawatts respectively.
The Legislative Committee recommended to Support SB 32 with Amendment.
 

Public Comments

None
 

Legislative Report from AQMD Home Rule Advisory Group Committee [Attachment 3]

Please refer to Attachment 3 for a written report.
 

Attachments (EXE, 1.71m)

1. Attendance Roster
2. Bill Language and AQMD Bill Analyses
3. Legislative Report from AQMD Home Rule Advisory Group