BILL ANALYSIS Ó
SB 170
Page 1
Date of Hearing: June 22, 2011
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
SB 170 (Pavley) - As Amended: May 10, 2011
SENATE VOTE : 25-14
SUBJECT : Air districts: adverse effects of air pollution:
intellectual property.
SUMMARY : Authorizes local and regional air pollution control
districts and air quality management districts to sponsor air
pollution prevention and mitigation projects, and allows
districts to share in revenues generated from the
commercialization of intellectual property, as specified.
Specifically, this bill :
1)Allows an air pollution control district (district) 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.
2)Allows 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.
3)Allows a district to negotiate revenue sharing agreements with
recipients of district funds, including the collection of
royalties.
4)Specifies that proceeds obtained by a district from these
revenue sharing agreements shall accrue to the district and be
deposited into a special account that may only be used,
subject to the district's ability to recover its expenses and
its administrative costs, for either of the following
purposes:
a) To fund 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; or,
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b) To develop low-polluting fuels or technologies.
5)Provides that a district shall not receive a benefit pursuant
to the bill's provisions in excess of the amount of the
district's investment in the development of a process,
machine, or article of manufacture, if the district adopts a
rule or regulation that mandates the use of that process,
machine or article of manufacture and that regulation of rule
was adopted after the development of the process, machine, or
article of manufacture.
6)Provides that if the state or a subdivision of the state
purchases or licenses a good, service, or process for which a
district accrues a benefit resulting from an intellectual
property interest negotiated pursuant to 1) or 2) above, upon
the request of the Department of General Services (DGS), the
district shall prepare reimbursement to the General Fund for
the amount of the benefit accrued.
7)Requires a district that attempts to negotiate for benefits to
report annually to the Legislature, and include the following
in the report:
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, including agreed upon terms for revenue sharing;
and,
c) A list of all district-funded projects from previous
years that have resulted in a benefit, if any, and the
total amount of that benefit to date.
8)Provides that a district may include the report specified in
7) above as part of another report submitted to the
Legislature by the district.
9)Provides that provisions of this bill related to intellectual
property and benefits shall become inoperative on January 1,
2018.
10)Provides that an agreement made prior to January 1, 2018,
pursuant to the bill's provisions, shall remain in effect for
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the duration of the agreement.
EXISTING LAW :
1)Provides the California Air Resources Board (CARB) 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.
2)Requires CARB to coordinate efforts to attain and maintain
ambient air quality standards.
3)Provides that districts have primary responsibility for
controlling air pollution from all sources, other than
emissions from mobile sources.
4)Requires the Independent Citizen's Oversight Committee, as
part of the California Institute for Regenerative Medicine
(CIRM), to establish standards that require that all grants
and loan awards be subject to intellectual property agreements
that balance the opportunity of the State of California to
benefit from the patents, royalties, and licenses that result
from basic research, therapy development, and clinical trials
with the need to ensure that essential medical research is not
unreasonably hindered by the intellectual property agreements.
5)Requires all revenues received through the intellectual
property agreements as specified in
4) above to be deposited into the General Fund.
6)Allows CIRM to accept additional revenue and real and personal
property, including, but not limited to, gifts, royalties,
interest, and appropriations that may be used to supplement
annual research grant funding and the operations of CIRM.
7)Provides, as part of the Public Interest Energy Research
(PIER) Program administered by the California Energy
Commission (CEC), to the extent that intellectual property is
developed under the PIER program, that an equitable share of
rights in the intellectual property or in the benefits derived
therefrom shall accrue to the State of California.
8)Allows CEC, for the PIER Program, to determine what share, if
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any, of the intellectual property, or the benefits derived
therefrom, shall accrue to the state and allows CEC to
negotiate sharing mechanisms for intellectual property or
benefits with award recipients.
FISCAL EFFECT : None
COMMENTS :
1)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 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."
2)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."
3)According to the author and the bill's sponsor, the South
Coast Air Quality Management District, SB 170 "seeks to, on a
voluntary basis, allow state air districts the option to share
in revenues generated from the commercialization of
intellectual property developed with air district research
grant funding, just as private sector investors can. Revenues
generated 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."
4)A similar bill, SB 778 (Pavley) was sponsored by the South
Coast Air Quality Management District (South Coast AQMD) in
2010 and would have specifically allowed South Coast AQMD to
sponsor, coordinate, and promote air pollution prevention or
mitigation projects and would have authorized South Coast AQMD
to determine what share, if any, of the intellectual property,
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or benefits resulting from intellectual property, developed
from the use of district funds, including funds discharged as
grants, would have accrued. The provisions of SB 778 were
never heard in policy committee and the bill did not move.
5)Support arguments: The American Lung Association, in support,
writes that this bill "provides local air pollution control
districts with an important new tool for cleaning up
California's air and protecting public health."
Opposition arguments: The Committee may wish to consider what
effect this will have on contract law as it pertains to the
use and benefit of intellectual property rights and the
royalties derived from such intellectual property rights.
6)This bill is doubled-referred to the Natural Resources
Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
South Coast Air Quality Management District ÝSPONSOR]
American Lung Association
Opposition
None on file
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958