BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 170|
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                              UNFINISHED BUSINESS


          Bill No:  SB 170
          Author:   Pavley (D)
          Amended:  7/12/11
          Vote:     21

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

           SENATE FLOOR :  25-14, 05/31/11
          AYES:  Alquist, Calderon, Corbett, Correa, De León, 
            DeSaulnier, Evans, Hancock, Hernandez, Kehoe, Leno, Lieu, 
            Liu, Lowenthal, Negrete McLeod, Padilla, Pavley, Price, 
            Rubio, Simitian, Steinberg, Vargas, Wolk, Wright, Yee
          NOES: Anderson, Blakeslee, Cannella, Dutton, Emmerson, 
            Fuller, Gaines, Harman, Huff, La Malfa, Runner, 
            Strickland, Walters, Wyland
          NO VOTE RECORDED: Berryhill

           ASSEMBLY FLOOR  :  48-27, 08/25/11 - See last page for vote


           SUBJECT  :    Air pollution:  districts

           SOURCE  :     South Coast Air Quality Management District


           DIGEST  :    This authorizes the 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 
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          pollution.  The bill, until January 1, 2017, authorizes 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 would prohibit 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 subdivision of the state purchases or licenses a 
          process, machine, or article of manufacture 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.  The bill requires a district that 
          attempts to negotiate for benefits pursuant to these 
          provisions to report annually to the Legislature, as 
          provided.

           Assembly Amendments  change the sunset date from 1/1/18 to 
          1/1/17, and make clarifying changes.

           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, until 1/1/17:

          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.

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          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 fund projects to 
            reduce or mitigate air pollution through the development 
            or implementation of pollution controls, low or zero 
            polluting fuels or technologies prevention measures.

          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 process, machine, or article of manufacture 
            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 

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               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.

          2.Does not apply to a contract governed by the Education 
            Code.

           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 
          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 

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          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  8/25/11)

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



           ASSEMBLY FLOOR  :  48-27, 08/25/11
          AYES:  Alejo, Allen, Ammiano, Atkins, Beall, Block, 
            Blumenfield, Bradford, Brownley, Buchanan, Butler, 
            Campos, Carter, Cedillo, Chesbro, Davis, Dickinson, Eng, 
            Feuer, Fong, Fuentes, Furutani, Gatto, Gordon, Hayashi, 
            Roger Hernández, Hill, Huber, Hueso, Huffman, Lara, 
            Bonnie Lowenthal, Ma, Mendoza, Mitchell, Monning, Pan, 
            Perea, V. Manuel Pérez, Portantino, Skinner, Solorio, 
            Swanson, Torres, Wieckowski, Williams, Yamada, John A. 
            Pérez
          NOES:  Achadjian, Bill Berryhill, Conway, Cook, Donnelly, 
            Fletcher, Beth Gaines, Garrick, Grove, Hagman, Halderman, 
            Harkey, Jeffries, Jones, Knight, Logue, Mansoor, Miller, 
            Morrell, Nestande, Nielsen, Norby, Olsen, Silva, Smyth, 
            Valadao, Wagner
          NO VOTE RECORDED:  Bonilla, Charles Calderon, Galgiani, 
            Gorell, Hall



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          DLW:nl  8/26/11   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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