BILL ANALYSIS
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THIRD READING
Bill No: SB 390
Author: Kehoe (D)
Amended: 1/25/10
Vote: 21
SENATE ENV. QUALITY COMMITTEE : 7-0, 4/20/09
AYES: Simitian, Runner, Ashburn, Corbett, Hancock,
Lowenthal, Pavley
SENATE APPROPRIATIONS COMMITTEE : 9-0, 1/21/10
AYES: Kehoe, Cox, Corbett, Denham, Leno, Liu, Price,
Walters, Yee
SUBJECT : Recycling Market Development Revolving Loan
Program
SOURCE : California Department of Resources, Recovery
and Recycling
DIGEST : This bill extends the sunset date from 2012 to
2022 and also updates the Recycling Market Development
Revolving Loan Program within the Department of Resources,
Recovery and Recycling which is formerly known as the
California Integrated Waste Management Board.
ANALYSIS :
Existing law , under the California Integrated Waste
Management Act (Act) of 1989:
CONTINUED
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1.Requires each city or county source reduction and
recycling element to include an implementation schedule
that shows a city or county must divert 25 percent of
solid waste from landfill disposal or transformation by
January 1, 1995, through source reduction, recycling, and
composting activities, and must divert 50 percent of
solid waste on and after January 1, 2000.
2.Establishes a Market Development Program to assist local
governments in meeting the requirements of #1 above and
requires the California Integrated Waste Management Board
which was abolished and reestablished as the Department
of Resources, Recovery and Recycling (department) to
develop a comprehensive market development plan to
stimulate market demand for post-consumer water materials
generated in California.
3.Establishes a Recycling Market Development Zone (RMDZ)
Program within the department that works with local zone
administrators to establish zones throughout California
to encourage recycling businesses through a variety of
local incentives.
4.Establishes the Recycling Market Development Revolving
Loan Program (loan program) to provide loans to recycling
businesses as specified.
5.Establishes the Recycling Market Development Revolving
Loan Subaccount (subaccount) in the Integrated Waste
Management Account and continuously appropriates funds
deposited in the subaccount to the department for making
loans for the purposes of the loan program. The funds
are from the state solid waste tipping fee, not the
general fund.
6.Establishes a per loan cap of two million dollars and not
to exceed three-fourths the total cost of the project.
7.Makes the provisions regarding the loan program, the
creation of the subaccount, and expenditures from the
subaccount inoperative on July 1, 2011, and repeals them
as of January 1, 2012, and provides for disposition of
funds remaining after sunset and repeal.
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This bill:
1.Creates a two-tiered loan program that allows for larger
loans if there is sufficient money in the subaccount.
2.Establishes a sunset provision for the new, larger loans
in July 1, 2016.
3.Extends the sunset provisions for the loan program from
July 1, 2011 to July 1, 2021.
4.Prohibits the department from funding a loan under the
program until it determines that the applicant has
obtained all significant applicable federal, state, and
local permits.
5.Extends the program and the continuous appropriation to
July 1, 2021, and the repeal date to January 1, 2022.
Background
The RMDZ program was established by Senate Bill 1322
(Bergeson), Chapter 1096, Statutes of 1989, and codified in
Public Resources Code sections 42010-42024. The goal for
the program is to further the establishment of local and
regional markets for the increased materials being
collected by local jurisdictions. In order to accomplish
this goal, the department must provide the right
combination of technical/financial incentives and resources
to attract/retain recycling manufacturers, ensure local
Zone Administrators are adequately trained, ensure the most
efficient use of limited state resources, and provide RMDZ
opportunities to as many local jurisdictions as possible.
Program Description . There are currently 33 zones located
throughout the state. These zones are comprised of 220
cities and 29 counties (46 percent of all jurisdictions
statewide). The RMDZs cover approximately 85,000 square
miles or 52 percent of California, and represent almost 20
million Californians (approximately 54 percent of the total
population).
The RMDZs are managed at the local level by Zone
Administrators (ZAs). The ZAs are typically comprised of
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staff from local government waste management departments,
economic development, etc. The program is unique for the
department, in that its intent is to "marry" recycling and
sustainability efforts with economic development effort.
NOTE: Please refer to the Senate Environmental Quality
Committee's analysis for further information.
Related legislation
AB 1581 (Assembly Natural Resources Committee) would extend
the sunset date for the RMDZ loan program until 2016 (in
Senate Environmental Quality Committee).
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee analysis:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12
2012-13 Fund
Program sunset extension $4,000$4,000
Special*
*Integrated Waste Management Account
SUPPORT : (Verified 1/25/10)
California Department of Resources, Recovery and Recycling
(source)
California Recycling Market Development Zone Association
(if amended)
City of Los Angeles
City of Vernon
Kings County Economic Development Corporation
Regional Council of Rural Counties
Sanitation Districts of Los Angeles County
Siskiyou County Economic Development Council
Tulare County Economic Development Corporation
Waste Management
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OPPOSITION : (Verified 1/25/10)
California Resource Recovery Association
ARGUMENTS IN SUPPORT : The proponents of this bill
contend that this bill will greatly enhance the ongoing
effort of the current RMDZ Loan Program, while allowing the
Department of Resources, Recovery and Recycling to provide
larger loans for larger market development projects. These
large loans will allow recycling businesses to phase
expensive equipment and help local jurisdictions to meet
the current mandate to increase diversion of solid waste
from California landfills. The proponents contend that
this bill will help the state keep up with current market
conditions for recycling businesses to site, expand, and
purchase new equipment.
ARGUMENTS IN OPPOSITION : The opponents of this bill
indicate that the RMDZ Loan Program is going to be
expanded next year to its statutory limit of 40 zones,
which will likely increase overall demand for loan funds.
The opponents believe that this bill contains no safeguards
to ensure that the overall loan fund will be recapitalized
if funds are loaned out on larger projects in certain
zones. The opponents believe that increasing the maximum
loan amount for these projects as proposed in this bill
could cause the fund to go from its current total reserve
of $13 million to under $5 million in just one or two years
of strong demand.
TSM:do 1/26/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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