BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           390 (Kehoe)
          
          Hearing Date:  05/28/2009           Amended: 05/05/2009
          Consultant:  Brendan McCarthy   Policy Vote: 7-0
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          ____
          BILL SUMMARY: SB 390 extends the sunset of an existing program  
          that provides loans to recycling businesses from 2011 to 2021.  
          The bill also creates a two-tiered loan program that allows for  
          larger loans if sufficient funds are available. The larger loans  
          would be available until 2016.
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2010-11      2011-12       2012-13     Fund
           
          Program sunset extension                      $4,000     
          $4,000Special *

          * Integrated Waste Management Account
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          ____

          STAFF COMMENTS: Suspense file. 
          
          Current law provides that the Legislature may transfer up to $5  
          million in the annual Budget Act from the Integrated Waste  
          Management Account to the Recycling Market Development Revolving  
          Loan Subaccount (a continuously appropriated account) to provide  
          loans to recycling businesses. Current law establishes a cap of  
          $2 million per loan made from the account. The program is set to  
          become inoperative in July 2011 and sunset in July 2012, with  
          remaining funds and loan repayments reverting to the Integrated  
          Waste Management Account.

          This bill would extend the sunset of the program from 2012 to  
          2022. In addition, the bill would remove the $5 million  
          limitation on transfers from the Integrated Waste Management  
          Account to the Subaccount, allowing the Legislature to transfer  
          funds as available in the annual Budget Act. The bill would also  
          create a two-tiered loan program.  Provided there is more than  
          $5 million in the Subaccount, the Board would be allowed to make  










          loans up to $5 million, as long as these larger loans are funded  
          from the balance in the account above $5 million. (Thus leaving  
          at least the first $5 million in the Subaccount for smaller  
          loans.)

          By extending the sunset of this program and allowing for larger  
          loans, this bill will increase funding pressures on other  
          programs funded from the Integrated Waste Management Account.  
          This Account is currently running a structural deficit, with  
          expenditures exceeding revenues by $6.2 million in the 2009-10  
          budget year, leaving a year-end fund balance of only $4.5  
          million.