BILL NUMBER: SB 390	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 13, 2009

INTRODUCED BY   Senator Kehoe

                        FEBRUARY 26, 2009

   An act to amend Sections 42023.1, 42023.2,  42023.4
  42023.3  , 42023.5, and 42023.6 of, and to
 repeal Section 42023.3   amend, add, and repeal
Section 42023.4  of, the Public Resources Code, relating to
solid waste, and making an appropriation therefor.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 390, as amended, Kehoe. Solid waste: recycling market
development.
   (1) The California Integrated Waste Management Act of 1989, which
is administered by the California Integrated Waste Management Board,
establishes an integrated waste management program. The act creates
the Recycling Market Development Revolving Loan Subaccount in the
Integrated Waste Management Account and continuously appropriates the
funds deposited in the subaccount to the board for making loans for
the purposes of the Recycling Market Development Revolving Loan
Program (program). Existing law makes the provisions regarding the
loan program, the creation of the subaccount, and expenditures
therefrom inoperative on July 1, 2011, and repeals them as of January
1, 2012, and provides for disposition of funds remaining after
inoperation and repeal.
   This bill would  delete the inoperative and repeal dates,
thereby indefinitely continuing   extend  the
program and the continuous appropriation  to July 1, 2021 and the
repeal date to January 1, 2022  ,  and 
thereby making an appropriation  , and would delete the
provisions providing for disposition of funds remaining after
inoperation and repeal  .
   (2) The act requires, upon authorization by the Legislature in the
annual Budget Act, the Controller to transfer a sum that does not
exceed $5,000,000 from the account to the subaccount as necessary to
meet anticipated loan demand under the program. The act provides that
the transferred amount is a loan to the subaccount, repayable with
interest to the account.
   This bill would delete the limitation of the transfer to
$5,000,000 and the requirement that the amount transferred be a loan
to the subaccount, repayable with interest.
   (3) The act requires the board under the program to finance by a
recycling market development loan not more than 3/4 of the cost of
each project, or not more than $2,000,000 for each project, whichever
is less.
   This bill , instead,  would authorize the board
 , until July 1, 2016, and if the money in the subaccount is in
excess of $5,000,000,  to  expend not more than 50% of
the amount available in the subaccount at the beginning of each
fiscal year for   provide  loans that do not exceed
the lesser of  $2,000,000   $5,000,000  or
3/4 of the cost of the project  to be funded by the loan,
and to expend not more than 50% of the amount available in the
subaccount at the beginning of each fiscal year for loans that are
greater than $2,000,000, but do not exceed $5,000,000, and do not
exceed   3/4   of the cost of the
project to be funded by the loan  . 
   (4) The act requires the board to give highest priority for
funding to certain projects and to approve only those loan
applications demonstrating loan repayment ability. This bill would
delete this requirement. 
   Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 42023.1 of the Public Resources Code is amended
to read:
   42023.1.  (a) The Recycling Market Development Revolving Loan
Subaccount is hereby created in the account for the purpose of
providing loans for purposes of the Recycling Market Development
Revolving Loan Program established pursuant to this article.
   (b) Notwithstanding Section 13340 of the Government Code, the
funds deposited in the subaccount are hereby continuously
appropriated to the board without regard to fiscal year for making
loans pursuant to this article.
   (c) The board may expend interest earnings on funds in the
subaccount for administrative expenses incurred in carrying out the
Recycling Market Development Revolving Loan Program, upon the
appropriation of funds in the subaccount for that purpose in the
annual Budget Act.
   (d) The money from loan repayments and fees, including, but not
limited to, principal and interest repayments, fees and points,
recovery of collection costs, income earned on an asset recovered
pursuant to a loan default, and funds collected through foreclosure
actions, shall be deposited in the subaccount.
   (e) All interest accruing on interest payments from loan
applicants shall be deposited in the subaccount.
   (f) The board may expend the money in the subaccount to make loans
to local governing bodies, private businesses, and nonprofit
entities within recycling market development zones, or in areas
outside zones where partnerships exist with other public entities to
assist local jurisdictions to comply with Section 40051.
   (g) The board shall establish and collect fees for applications
for loans authorized by this section. The application fee shall be
set at a level that is sufficient to fund the board's cost of
processing applications for loans. In addition, the board shall
establish a schedule of fees, or points, for loans that are entered
into by the board, to fund the board's administration of the
revolving loan program.
   (h) The board may expend money in the subaccount for the
administration of the Recycling Market Development Revolving Loan
Program, upon the appropriation of funds in the subaccount for that
purpose in the annual Budget Act. In addition, the board may expend
money in the account to administer the revolving loan program, upon
the appropriation of funds in the subaccount for that purpose in the
annual Budget Act. However, funding for the administration of the
revolving loan program from the account shall be provided only if
there are not sufficient funds in the subaccount to fully fund the
administration of the program.
   (i) The board, pursuant to subdivision (a) of Section 47901, may
set aside funds for the purposes of paying costs necessary to protect
the state's position as a lender-creditor. These costs shall be
broadly construed to include, but not be limited to, foreclosure
expenses, auction fees, title searches, appraisals, real estate
brokerage fees, attorney fees, mortgage payments, insurance payments,
utility costs, repair costs, removal and storage costs for
repossessed equipment and inventory, and additional expenditures to
purchase a senior lien in foreclosure or bankruptcy proceedings. 

   (j) (1) Except as provided in paragraph (2), this section shall
become inoperative on July 1, 2021, and as of January 1, 2022, is
repealed, unless a later enacted statute, which becomes effective on
or before January 1, 2022, deletes or extends the date on which it
becomes inoperative and is repealed.  
   (2) The repeal of this section pursuant to paragraph (1) shall not
extinguish any loan obligation or the authority of the state to
pursue appropriate actions for the collection of a loan. 
  SEC. 2.  Section 42023.2 of the Public Resources Code is amended to
read:
   42023.2.   (a)    Upon authorization by the
Legislature in the annual Budget Act, the Controller shall transfer a
sum, as available, from the account to the subaccount as necessary
to meet anticipated loan demand under the program. 
   (b) (1) Except as provided in paragraph (2), this section shall
become inoperative on July 1, 2021, and as of January 1, 2022, is
repealed, unless a later enacted statute, which becomes effective on
or before January 1, 2022, deletes or extends the date on which it
becomes inoperative and is repealed.  
   (2) The repeal of this section pursuant to paragraph (1) shall not
extinguish any loan obligation or the authority of the state to
pursue appropriate actions for the collection of a loan. 

  SEC. 3.    Section 42023.3 of the Public Resources
Code is repealed. 
  SEC. 3.    Section 42023.3 of the   Public
Resources Code   is amended to read: 
   42023.3.  (a) All money remaining in the subaccount on July 1,
 2011,   2021,  and all money received as
repayment and interest on loans shall, as of July 1,  2011,
  2021,  be transferred to the account and any
money due and outstanding on loans as of July 1,  2011,
  2021,  shall be repaid to the board and deposited
by the board in the account until paid in full, except that, upon
authorization by the Legislature in the annual Budget Act, interest
earnings may be expended for administrative costs associated with the
collection of outstanding loan accounts.
   (b) (1) Except as provided in paragraph (2), this section shall
become inoperative on July 1,  2011,   2021,
 and as of January 1,  2012,   2022, 
is repealed, unless a later enacted statute, which becomes effective
on or before January 1,  2012,   2022, 
deletes or extends the dates on which it becomes inoperative and is
repealed.
   (2) The repeal of this section pursuant to paragraph (1) shall not
extinguish any loan obligation or the authority of the state to
pursue appropriate actions for the collection of a loan.
  SEC. 4.  Section 42023.4 of the Public Resources Code is amended to
read:
   42023.4.  (a) A loan made pursuant to Section 42023.1 shall be
subject to all of the following requirements:
   (1) The terms of an approved loan shall be specified in a loan
agreement between the borrower and the board. The loan agreement
shall include a requirement that the failure to comply with the
agreement shall result in any remaining unpaid amount of the loan,
with accrued interest, being immediately due and payable.
Notwithstanding any term of the agreement, a recipient of a loan that
the board approves shall repay the principal amount, plus interest
on the basis of the rate of return for money in the Surplus Money
Investment Fund at the time of the loan commitment.  All
  Except as provided in subdivision (a) of Section
42032.3, all  money received as repayment and interest on loans
made pursuant to this section shall be deposited in the subaccount.
   (2) The term of a loan made pursuant to this section shall be not
more than 10 years when collateralized by assets other than real
estate, or not more than 15 years when partially or wholly
collateralized by real estate. 
   (3) The board shall approve only those loan applications that
demonstrate the applicant's ability to repay the loan. The highest
priority for funding shall be given to projects that demonstrate that
the project will increase market demand for recycling the project's
type of postconsumer waste material.  
   (b) (1) The board may expend not more than 50 percent of the
amount available in the subaccount as of the beginning of each fiscal
year for loans that do not exceed the lesser of two million dollars
($2,000,000) or three-fourths of the cost of the project to be funded
by the loan.  
   (2) The board may expend not more than 50 percent of the amount
available in the subaccount as of the beginning of each fiscal year
for loans that are greater than two million dollars ($2,000,000), but
do not exceed five million dollars ($5,000,000), and do not exceed
three-fourths of the cost of the project to be funded by the loan.
 
   (3) A loan made pursuant to paragraph (1) or (2) shall promote
market demand for priority materials, as determined by the board.
 
   (3) (A) Except as provided in subparagraph (B), the board shall
not finance more than three-fourths of the cost of a project or two
million dollars ($2,000,000), whichever is less.  
   (B) Notwithstanding subparagraph (A), if there is money in the
subaccount in excess of five million dollars ($5,000,000), the board
may provide loans in an amount greater than two million dollars
($2,000,000), but not to exceed five million dollars ($5,000,000) and
in an amount not to exceed three-fourths of the project cost. The
loan amount in excess of two million dollars ($2,000,000) shall be
funded by the excess amount in the subaccount.  
   (c)
    (b)  The Department of Finance may audit the expenditure
of the proceeds of a loan made pursuant to Section 42023.1 and this
section. 
   (c) This section shall become inoperative on July 1, 2016, and as
of January 1, 2017, is repealed, unless a later enacted statute,
which becomes effective on or before January 1, 2017, deletes or
extends the date on which it becomes inoperative and is repealed.

   SEC. 5.    Section 42023.4 is added to the  
Public Resources Code   , to read:  
   42023.4.  (a) A loan made pursuant to Section 42023.1 shall be
subject to all of the following requirements:
   (1) The terms of an approved loan shall be specified in a loan
agreement between the borrower and the board. The loan agreement
shall include a requirement that the failure to comply with the
agreement shall result in any remaining unpaid amount of the loan,
with accrued interest, being immediately due and payable.
Notwithstanding any term of the agreement, a recipient of a loan that
the board approves shall repay the principal amount, plus interest
on the basis of the rate of return for money in the Surplus Money
Investment Fund at the time of the loan commitment. Except as
provided in subdivision (a) of Section 42032.3, all money received as
repayment and interest on loans made pursuant to this section shall
be deposited in the subaccount.
   (2) The term of a loan made pursuant to this section shall be not
more than 10 years when collateralized by assets other than real
estate, or not more than 15 years when partially or wholly
collateralized by real estate.
   (3) The board shall not finance more than three-fourths of the
cost of a project or two million dollars ($2,000,000), whichever is
less.
   (b) The Department of Finance may audit the expenditure of the
proceeds of a loan made pursuant to Section 42023.1 and this section.

   (c) This section shall become operative on July 1, 2016.
   (d) (1) Except as provided in paragraph (2), this section shall
become inoperative on July 1, 2021, and as of January 1, 2022, is
repealed, unless a later enacted statute, which becomes effective on
or before January 1, 2022, deletes or extends the date on which it
becomes inoperative and is repealed.
   (2) The repeal of this section pursuant to paragraph (1) shall not
extinguish any loan obligation or the authority of the state to
pursue appropriate actions for the collection of a loan. 
   SEC. 5.   SEC. 6.   Section 42023.5 of
the Public Resources Code is amended to read:
   42023.5.   (a)    The board shall, as part of
the annual report to the Legislature, pursuant to Section 40507,
include a report on the performance of the Recycling Market
Development Revolving Loan Program, including the number and size of
loans made, characteristics of loan recipients, projected loan
demand, and the cost of administering the program. 
   (b) This section shall become inoperative on July 1, 2021, and as
of January 1, 2022, is repealed, unless a later enacted statute,
which becomes effective on or before January 1, 2022, deletes or
extends the date on which it becomes inoperative and is repealed.

   SEC. 6.   SEC. 7.   Section 42023.6 of
the Public Resources Code is amended to read:
   42023.6.  (a) The board shall encourage applicants to seek
participation from private financial institutions or other public
agencies. For purposes of enabling the board and local agencies to
comply with Sections 40051 and 41780, the board may participate, in
an amount not to exceed five hundred thousand dollars ($500,000), in
the Capital Access Loan Program as provided in Article 8 (commencing
with Section 44559) of Chapter 1 of Division 27 of the Health and
Safety Code.
   (b) For purposes of participating in the Capital Access Loan
Program, as specified in subdivision (a), or in a program that
leverages subaccount funds, the board may operate both inside and
outside the recycling market development zones. 
   (c) (1) Except as provided in paragraph (2), this section shall
become inoperative on July 1, 2021, and as of January 1, 2022, is
repealed, unless a later enacted statute, which becomes effective on
or before January 1, 2022, deletes or extends the date on which it
becomes inoperative and is repealed.  
   (2) The repeal of this section pursuant to paragraph (1) shall not
extinguish any loan obligation or the authority of the state to
pursue appropriate actions for the collection of a loan.