BILL ANALYSIS
SB 390
Page 1
SENATE THIRD READING
SB 390 (Kehoe)
As Amended August 20, 2010
Majority vote
SENATE VOTE :35-0
NATURAL RESOURCES 7-0 APPROPRIATIONS 17-0
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|Ayes:|Chesbro, Gilmore, |Ayes:|Fuentes, Conway, |
| |Brownley, | |Bradford, |
| |De Leon, Hill, Huffman, | |Huffman, Coto, Davis, De |
| |Logue | |Leon, Gatto, Hall, |
| | | |Harkey, Miller, Nielsen, |
| | | |Norby, Skinner, Solorio, |
| | | |Torlakson, Torrico |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : 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 post consumer 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.
SB 390
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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 purposes of the RMDZ
Program. The funds are from the state solid waste tipping
fee, not the General Fund.
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, repeals them as of January 1,
2012, and provides for disposition of funds remaining after
sunset and repeal.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, 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 : According to the author, the 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 post consumer 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.
The RMDZ Program was established by SB 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, DRRR must provide the right
combination of technical/financial incentives and resources to
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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. The program is
intended to combine recycling and sustainability efforts with
economic development.
There are currently 33 zones located throughout the state.
These zones include 220 cities and 29 counties (46% of all
jurisdictions statewide). The RMDZs cover approximately 85,000
square miles, or 52% of California, and represent almost 20
million Californians (approximately 54% of the total
population).
The initial funding for the Program came from the Integrated
Waste Management Account; the ongoing loan program is funded by
loan repayments.
Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916)
319-2092
FN: 0006382