BILL NUMBER: SB 390	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 26, 2010
	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  , 42023.4
 , 42023.5, and 42023.6 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 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 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.
   The bill would prohibit the department from funding a loan under
the program until it determines that the applicant has obtained all
significant, as determined by the 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 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 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. 
   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.
  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 department without regard to fiscal year for
making loans pursuant to this article.
   (c) The 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 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 department shall not fund a loan until it determines that
the applicant has obtained all significant applicable federal, state,
and local permits. The department shall determine which applicable
federal, state, and local permits are significant.
   (h) The 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 department'
s cost of processing applications for loans. In addition, the
department shall establish a schedule of fees, or points, for loans
that are entered into by the department  , to fund the department'
s  administration of the revolving loan program.
   (i) The 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 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 department, 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. 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 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. 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 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. 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 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 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
  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. 
   (4) (A) Except as provided in subparagraph (B), the 
    (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) Notwithstanding subparagraph (A), if the department determines
that there is money in the subaccount in excess of five million
dollars ($5,000,000), then the 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) 
    (5)  The Department of Finance may audit the expenditure
of the proceeds of a loan made pursuant to Section 42023.1 and this
section. 
   (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. 

   (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. 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 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 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.
   (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. 7.   SEC. 6.   Section 42023.5 of
the Public Resources Code is amended to read:
   42023.5.  (a) The 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. 8.   SEC. 7.   Section 42023.6 of
the Public Resources Code is amended to read:
   42023.6.  (a) The department shall encourage applicants to seek
participation from private financial institutions or other public
agencies. For purposes of enabling the department and local agencies
to comply with Sections 40051 and 41780, the 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 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.