BILL ANALYSIS �
SB 170
Page 1
SENATE THIRD READING
SB 170 (Pavley)
As Amended July 12, 2011
Majority vote
SENATE VOTE : 25-14
LOCAL GOVERNMENT 6-3 NATURAL RESOURCES 5-2
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|Ayes:|Skinner, Bradford, |Ayes:|Chesbro, Brownley, |
| |Campos, Davis, Gordon, | |Dickinson, Huffman, |
| |Hueso | |Monning |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Smyth, Knight, Norby |Nays:|Knight, Grove |
| | | | |
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APPROPRIATIONS 12-5
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|Ayes:|Fuentes, Blumenfield, | | |
| |Bradford, Charles | | |
| |Calderon, Campos, Davis, | | |
| |Gatto, Hall, Hill, Lara, | | |
| |Mitchell, Solorio | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Harkey, Donnelly, | | |
| |Nielsen, Norby, Wagner | | |
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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 a local and regional air pollution control district and
air quality management district (district) to sponsor,
coordinate, and promote projects that will lead to the
prevention, mitigation, or cure of the adverse effects of air
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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,
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, or
pollution prevention measures.
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 process, machine, or article of
manufacture 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
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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)Declares that the requirements under the bill do not apply to
specified contracts between the state and the University of
California or the California State University.
10)Provides that provisions of this bill related to intellectual
property and benefits shall become inoperative on January 1,
2017.
11)Provides that an agreement made prior to January 1, 2017,
pursuant to the bill's provisions, shall remain in effect for
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.
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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
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 : According to the Assembly Appropriations
Committee, there are no state costs.
COMMENTS : According to the author, "air districts throughout
the state cosponsor and fund research, development,
demonstration and commercialization of clean technologies to
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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 and the bill's sponsor, the South Coast
Air Quality Management District (South Coast AQMD), this bill
"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 fund projects that
reduce or mitigate air pollution through the development or
implementation of pollution controls, low or zero polluting
fuels or technologies, or pollution prevention measures."
A similar bill, SB 778 (Pavley) was sponsored by the 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, 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 (Pavley) were never heard in policy committee and the
bill did not move.
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."
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Opposition arguments: The Legislature 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.
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958
FN:
0001960