BILL NUMBER: SB 390	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JANUARY 25, 2010
	AMENDED IN SENATE  MAY 20, 2009
	AMENDED IN SENATE  MAY 5, 2009
	AMENDED IN SENATE  APRIL 22, 2009
	AMENDED IN SENATE  APRIL 13, 2009

INTRODUCED BY   Senator Kehoe

                        FEBRUARY 26, 2009

   An act to amend Sections 42023.1, 42023.2, 42023.3, 42023.5, and
42023.6 of, and to amend, add, and repeal Section 42023.4 of
  to amend, add, and repeal Section 42023.4 of, and to
add Section 40118 to  , 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,   Department of Resources Recycling
and Recovery  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   department  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  define the term "department" for purposes of
the act.   prohibit 
    The bill would  prohibit the  board 
 department  from funding a loan under the program until it
determines that the applicant has obtained all  significantly
  significant  , as determined by the 
board   department  , applicable federal, state,
and local permits and would extend the program and the continuous
appropriation to July 1, 2021, and the repeal date to January 1,
2022, thereby making an appropriation.
   (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. The bill would
retroactively delete the requirement that the amount transferred from
the account to the subaccount be repaid with interest.
   (3) The act requires the  board  department
 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 would authorize the  board  
department  , until July 1, 2016, and if the money in the
subaccount is in excess of $5,000,000, to provide loans that do not
exceed the lesser of $5,000,000 or 3/4 of the cost of the project.

   (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 40118 is added to the 
 Public Resources Code   , to read:  
   40118.  "Department" means the Department of Resources Recycling
and Recovery. 
   SECTION 1.   SEC. 2.   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   department 
without regard to fiscal year for making loans pursuant to this
article.
   (c) The  board   department  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  department  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   department  shall not
fund a loan until it determines that the applicant has obtained all
 significantly   significant  applicable
federal, state, and local permits. The  board  
department  shall determine which applicable federal, state, and
local permits are significant.
   (h) The  board   department  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   department's
 cost of processing applications for loans. In addition, the
 board   department  shall establish a
schedule of fees, or points, for loans that are entered into by the
 board, to fund the board's   department 
administration of the revolving loan program.
   (i) The  board   department  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   department  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.
   (j) The  board   d   epartment 
, 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.
   (k) (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.   SEC. 3.   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) (A) 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.
   (B) The  board   department  shall not
be obligated to pay interest on the amount appropriated from the
account to the subaccount pursuant to subdivision (a). This
subparagraph shall apply retroactively from January 1, 1992.
   SEC. 3.   SEC. 4.   Section 42023.3 of
the Public Resources Code is amended to read:
   42023.3.  (a) All money remaining in the subaccount on July 1,
2021, and all money received as repayment and interest on loans
shall, as of July 1, 2021, be transferred to the account and any
money due and outstanding on loans as of July 1, 2021, shall be
repaid to the  board and deposited by the board 
 department and deposited by the department  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, 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 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.   SEC. 5.   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  
department  . 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 
 department  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 42023.3, 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 department 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.  
   (3) 
    (4)  (A) Except as provided in subparagraph (B), the
 board   department  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 the  board
  department  determines that there is money in the
subaccount in excess of five million dollars ($5,000,000), then the
 board   department  may finance a loan or
loans in an amount that is greater than two million dollars
($2,000,000), but does not exceed five million dollars ($5,000,000)
and does not exceed three-fourths of the project cost  , 
from that excess amount.
   (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.   SEC. 6.   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  
department  . 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 
 department  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 42023.3, 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 department 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.  
   (3) The board 
    (4)     The department  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. 6.   SEC. 7.   Section 42023.5 of
the Public Resources Code is amended to read:
   42023.5.  (a) The  board   department 
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. 7.  SEC. 8.   Section 42023.6 of
the Public Resources Code is amended to read:
   42023.6.  (a) The  board   department 
shall encourage applicants to seek participation from private
financial institutions or other public agencies. For purposes of
enabling the  board   department  and local
agencies to comply with Sections 40051 and 41780, the  board
  department  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  
department  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.