BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 170|
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                                 THIRD READING


          Bill No:  SB 170
          Author:   Pavley (D)
          Amended:  5/10/11
          Vote:     21

           
           SENATE ENVIRONMENTAL QUALITY COMMITTEE  :  5-1, 05/02/11
          AYES:  Simitian, Hancock, Kehoe, Lowenthal, Pavley
          NOES:  Blakeslee
          NO VOTE RECORDED:  Strickland


           SUBJECT  :    Air pollution:  districts

           SOURCE  :     South Coast Air Quality Management District


           DIGEST  :    This bill authorizes the local and regional air 
          pollution control districts and air quality management 
          districts to sponsor, coordinate, and promote projects that 
          will lead to the prevention, mitigation, or cure of the 
          adverse effects of air pollution, including the adverse 
          health effects of air pollution.  The bill authorizes, 
          until 1/1/18, a district to negotiate what share, if any, 
          of the intellectual property, or benefits resulting from 
          intellectual property, developed from the use of district 
          funds, including funds discharged as grants, will accrue to 
          that district.  The bill requires revenues generated from 
          revenue sharing agreements to be deposited into a special 
          account and used for specified purposes.  Under certain 
          circumstances, the bill prohibits a district from receiving 
          a benefit pursuant to these provisions in excess of the 
          amount of the district's investment.  If the state or a 
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          subdivision of the state purchases or licenses a good, 
          service, or process for which a district accrues a benefit 
          resulting from the intellectual property interest, the bill 
          requires the district, upon the request of the Department 
          of General Services, to provide reimbursement to the 
          General Fund for the amount of the benefit accrued.  This 
          bill requires a district that attempts to negotiate for 
          benefits pursuant to these provisions to report annually to 
          the Legislature, as provided.

           ANALYSIS  :    Existing law:

          1.Provides the Air Resources Board with primary 
            responsibility for control of mobile source air 
            pollution, including adoption of rules for reducing 
            vehicle emissions and the specification of vehicular fuel 
            composition.  The Board must coordinate efforts to attain 
            and maintain ambient air quality standards.

          2.Provides that districts have primary responsibility for 
            controlling air pollution from all sources, other than 
            emissions from mobile sources.

          This bill:

          1.Authorizes a district to sponsor, coordinate, and promote 
            projects that will lead to the prevention, mitigation, or 
            cure of adverse air pollution effects, including adverse 
            health effects of air quality.

          2.Authorizes a district to negotiate a share of 
            intellectual property (IP), or benefits of IP, developed 
            from use of district funds, including funds from grants 
            that will accrue to that district.

          3.Authorizes a district to negotiate revenue sharing 
            agreements with recipients of district funds, including 
            collection of royalties.  Proceeds obtained by the 
            district from these revenue sharing agreements must 
            accrue to the district and be deposited into a special 
            account that may only be used to:  a) fund projects that 
            will lead to the prevention, mitigation, or cure of 
            adverse air pollution effects, including the adverse 
            effects of air pollution; or b) to develop low-polluting 







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            fuels or technologies.

          4.Limits the benefit accrued to the district, to the 
            district's initial investment in the development of a 
            process, machine, or article of manufacture if the 
            district adopts a rule or regulation mandating it after 
            its development.

          5.Requires a district to reimburse the General Fund for the 
            amount of benefit accrued if the state purchases or 
            licenses a good, service, or process for which the 
            district accrues a benefit from an IP interest negotiated 
            under the above terms (#2 and 3 above), upon the request 
            of the Department of General Services.

          6.A district that attempts to negotiate for benefits 
            pursuant to this section shall report annually to the 
            Legislature.  The report shall include all of the 
            following:

             A.   The number of district-funded projects and the 
               number of district-funded projects for which a benefit 
               was negotiated, regardless of the outcome of the 
               negotiation.

             B.   The outcome of all negotiations regarding 
               intellectual property pursuant to this section, 
               including agreed terms for revenue sharing.

             C.   A list of all district-funded projects from 
               previous years that have resulted in a benefit 
               pursuant to this section, if any, and the total amount 
               of that benefit to date.

          1.A district may include a report required by this section 
            as part of another report submitted to the Legislature by 
            the district.

           Comments
           
          According to the author, "Air districts throughout the 
          state cosponsor and fund research, development, 
          demonstration and commercialization of clean technologies 
          to reduce or eliminate emissions.  The deficiency in the 







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          present law is that there is no clear authority for air 
          districts to share in revenue streams of ventures 
          resulting, in part, from their funding.  Such additional 
          revenues would enable air districts to sponsor additional 
          research, achieve further reductions in diesel and toxic 
          emissions, and provide greater health protection in 
          impacted communities."

          The author notes that "The California Institute for 
          Regenerative Medicine (CIRM) and the California Energy 
          Commission's Public Interest Energy Research, 
          Demonstration, and Development (PIER) Program are prime 
          examples of what air districts hope to achieve, clear 
          authorization which allows them to negotiate revenue 
          sharing agreements with grant recipients."

          According to the author, SB 170 "seeks to, on a voluntary 
          basis, allow state air districts the option to share in 
          revenues generated from the commercialization of IP 
          developed with air district research grant funding.  Said 
          revenues would be deposited in a special account created by 
          the air district and spent on the prevention, mitigation, 
          or cure of the adverse effects of air pollution or to 
          develop low-polluting fuels or technologies."

           Related Legislation
           
          AB 744 (Pérez) establishes the Office of Intellectual 
          Property in the Business, Transportation, and Housing 
          Agency to track IP generated by state employees and by 
          state funded research, and set related requirements (passed 
          to Assembly Appropriations Committee by Business, 
          Professions and Consumer Protection April 12, 2011 (6, 0)). 
           AB 2781 (Mullin) of 2006 established a similar office for 
          tracking IP (June 27, 2006, Senate Governmental 
          Organization hearing cancelled at request of author).

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  No

           SUPPORT  :   (Verified  5/20/11)

          South Coast Air Quality Management District (source) 
          American Lung Association







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          Environmental Defense Fund



          DLW:nl  5/23/11   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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