BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 390|
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UNFINISHED BUSINESS
Bill No: SB 390
Author: Kehoe (D), et al
Amended: 8/20/10
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
SENATE FLOOR : 35-0, 1/28/10
AYES: Aanestad, Ashburn, Calderon, Cedillo, Cogdill,
Corbett, Correa, Cox, Denham, DeSaulnier, Ducheny,
Dutton, Florez, Hancock, Harman, Hollingsworth, Kehoe,
Leno, Liu, Lowenthal, Maldonado, Negrete McLeod, Oropeza,
Padilla, Pavley, Price, Romero, Simitian, Steinberg,
Strickland, Wiggins, Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Alquist, Huff, Runner, Walters, Vacancy
ASSEMBLY FLOOR : 77-0, 8/23/10 - See last page for vote
SUBJECT : Recycling Market Development Revolving Loan
Program
SOURCE : Author
DIGEST : This bill extends the sunset on California's
CONTINUED
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Recycling Market Development Zone Program from July 1, 2011
to July 1, 2021, and makes related technical and clarifying
changes.
Assembly Amendments delete the provision that provided for
larger loans if there was sufficient money in the
subaccount.
ANALYSIS :
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 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
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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.
This bill:
1.Extends the sunset provisions for the loan program from
July 1, 2011 to July 1, 2021.
2.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.
3.Extends the program and the continuous appropriation to
July 1, 2021, and the repeal date to January 1, 2022.
Comments
According to the author's office, 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 Senate Bill 1322
(Bergeson), Chapter 1096, Statutes of 1989, and codified in
Public Resources Code sections 42010-42024. The goal for
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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
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 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.
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SUPPORT : (Verified 8/24/10)
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
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.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall, Bill
Berryhill, Tom Berryhill, Block, Blumenfield, Bradford,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Eng, Evans, Feuer, Fletcher, Fong, Fuentes,
Fuller, Gaines, Galgiani, Garrick, Gatto, Gilmore,
Hagman, Hall, Harkey, Hayashi, Hernandez, Hill, Huber,
Huffman, Jeffries, Jones, Knight, Lieu, Logue, Bonnie
Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande,
Niello, Nielsen, Norby, V. Manuel Perez, Portantino,
Ruskin, Salas, Saldana, Silva, Skinner, Smyth, Solorio,
Audra Strickland, Swanson, Torlakson, Torres, Torrico,
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Tran, Villines, Yamada, John A. Perez
NO VOTE RECORDED: Furutani, Vacancy, Vacancy
TSM:do 8/24/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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