BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 390 (Kehoe) Hearing Date: 01/21/2010 Amended: As proposed to be amended Consultant: Brendan McCarthy Policy Vote: 7-0 _________________________________________________________________ ____ 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. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Program sunset extension $4,000 $4,000Special * * Integrated Waste Management Account _________________________________________________________________ ____ 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. The proposed author's amendments make technical corrections to the bill.