BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 390
                                                                  Page  1

          Date of Hearing:   June 30, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    SB 390 (Kehoe) - As Amended:  April 26, 2010 

          Policy Committee:                             Natural  
          ResourcesVote:7-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill extends the sunset date-to January 1, 2021, from  
          January 1, 2011-for California's Recycling Market Development  
          Zone (RMDZ) Program.  The bill also removes the $5 million cap  
          on the annual amount to be transferred, upon appropriation, from  
          Integrated Waste Management Account (IWMA) to the Recycling  
          Market Development Revolving Subaccount.

           FISCAL EFFECT  

          Cost pressures of an unknown amount during the years 2010-11  
          through 2021-22 on other programs funded from the IWMA to the  
          extent the continuation of the RMDZ Program results in those  
          other programs receiving less IWMA funds than they otherwise  
          would.

           COMMENTS  

           1)Rationale  .  According to the author, continuation of the RMDZ  
            Program will allow further funding of businesses located in  
            RMDZs that increase diversion of nonhazardous solid waste from  
            California landfills and that promote market demand for  
            secondary and postconsumer materials.

           2)Background  .  The RMDZ Program was established by Senate Bill  
            1322 (Bergeson, Chapter 1096, Statutes of 1989) to encourage  
            establishment of local and regional private markets for the  
            increased amount of materials diverted from California's  
            landfills in keeping with state's waste reduction laws.   
            Initially, the program was funded by the Integrated Waste  
            Management Account.  The ongoing loan program is funded by  








                                                                  SB 390
                                                                  Page  2

            loan repayments.

            According to the department, currently there are 33 RMDZs  
            throughout the state, encompassing 220 cities and 29 counties.  
            RMDZs are managed at the local level by Zone  
            Administrators--typically staff from local government waste  
            management departments.  Calrecycle reports that, as of  
            January 2009, the program had funded 153 loans totaling $100  
            million, 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 (IWMA).  The ongoing loan program is  
            funded by loan repayments.  Current law authorizes, upon  
            appropriation of the Legislature, up to $5 million to be  
            transferred from the IWMA to the Recycling Market Development  
            Revolving Subaccount-the source of the loan program's funding.  
             This bill would remove the $5 million cap, leaving it to the  
            Legislature to determine the appropriate amount of funding to  
            appropriate to the subaccount from the IWMA.  

           3)Support  .  This bill is supported by numerous industry  
            organizations and several local governments, including the  
            City of Los Angeles, who contend the program provides critical  
            funding to develop a market for waste products diverted from  
            California land fills.

           4)There is no registered opposition to this bill.  

           Analysis Prepared by  :    Jay Dickenson / APPR. / (916) 319-2081