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  
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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

           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  

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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,  
          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.

           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

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          Solid Waste Association of North America
          Tulare County
          Waste Management 
           

           ARGUMENTS IN SUPPORT  :    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.

           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,  
            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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