BILL ANALYSIS
SB 390
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Date of Hearing: June 21, 2010
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
SB 390 (Kehoe) - As Amended: April 26, 2010
SENATE VOTE : 35-0
SUBJECT : Solid waste: recycling market development
SUMMARY : This bill extends the sunset on California's Recycling
Market Development Zone (RMDZ) Program from July 1, 2011 to July
1, 2021 and makes related technical and clarifying changes.
EXISTING LAW , under the California Integrated Waste Management
Act (Act) of 1989:
1)Requires each city or county source reduction and recycling
element to include an implementation schedule that shows a
city or county must divert 50% of solid waste from landfill
disposal or transformation by January 1, 2000, through source
reduction, recycling, and composting activities.
2)Establishes a Market Development Program to assist local
governments in meeting the requirements of #1 above and
requires the Department of Resources Recovery and Recycling
(DRRR) to develop a comprehensive market development plan to
stimulate market demand for postconsumer waste materials
generated in California.
3)Establishes the RMDZ Program within DRRR 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 DRRR for making loans for the purposes of the
loan program. The funds are from the state solid waste
tipping fee, not the General Fund.
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6)Establishes a per loan cap of $2 million, 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.
FISCAL EFFECT : This bill would extend the RMDZ loan program
until July 1, 2021.
COMMENTS :
1)Purpose of Bill . According to the author, he RMDZ Loan
Program provides direct low-interest loans to businesses and
non-profit organizations located in RMDZs that increase
diversion of non-hazardous solid waste from California
landfills and that promote market demand for secondary and
postconsumer materials. The loan program encourages banks to
jointly fund projects. In addition, the businesses receiving
loans get free technical assistance in permitting, business
plans, feedstock, and identifying potential markets. This
bill will preserve a financing program specifically for
California recycling manufacturers and provides stability to
borrowers.
2)History of the RMDZ Loan Program . The RMDZ Program was
established by Senate Bill 1322 (Bergeson, Chapter 1096,
Statutes of 1989). 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 DRRR 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.
3)How the RMDZ Program works . There are currently 33 zones
located throughout the state. These zones are comprised of
220 cities and 29 counties (46 percent of all jurisdictions
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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 staff from local
government waste management departments. The program is
intended to combine recycling and sustainability efforts with
economic development.
As of January 2009, DRRR had funded 153 loans totaling $100
million. The loans have resulted in an estimated additional 4
million tons per year of material being diverted from
California landfills and the creation of 1,930 jobs. The
average loan amount has been approximately $800,000.
The initial funding for the Program came from the Integrated
Waste Management Account; the ongoing loan program is funded
by loan repayments.
REGISTERED SUPPORT / OPPOSITION :
Support
California Recycling Market Development Zones Association
California Resource Recovery Association
City of Hesperia
City of Los Angeles
City of Vernon
Golden By-Products, Inc.
Kings County Economic Development Corporation
Pinnacle Plastic Containers, Leading Industry, Inc.
Regional Council of Rural Counties
Sanitation Districts of Los Angeles County
Siskiyou County
Solid Waste Association of North America
Tulare County
Waste Management
Opposition
None on file
SB 390
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Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916)
319-2092