BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                                2015 - 2016  Regular 

          SB 662 (Committee on Environmental Quality) - Recycling
          
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          |Version: February 27, 2015      |Policy Vote: E.Q. 7 - 0         |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date:  April 27, 2015   |Consultant: Marie Liu           |
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          This bill does not meet the criteria for referral to the  
          Suspense File.


          Bill  
          Summary:  SB 662 would extend the uses of the Recycling Market  
          Development Revolving Loan Subaccount (subaccount) to include  
          payments to local governments for services related to the  
          promotion of a recycling market development zone (RMDZ). This  
          bill would also change the annual reporting due date under the  
          architectural paint extended producer responsibility collection  
          program.


          Fiscal  
          Impact:  Ongoing costs of approximately $125,000 annually from  
          the Recycling Market Development Revolving Loan Subaccount  
          (special) for payments to RMDZ administrators for promotional  
          activities.


          Background:  Existing law requires the Department of Resources, Recycling  
          and Recovery (CalRecycle) to develop a comprehensive market  







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          development plan to stimulate market demand in the state for  
          waste material generated in the state, and requires the plan to  
          include efforts to encourage and promote cooperative, regional  
          programs to expand markets for recycled material. To this end,  
          CalRecycle is authorized to designate Recycling Market  
          Development Zones (RMDZs) to attract private sector recycling  
          investments. Local governments, private businesses, and  
          nonprofits within a RMDZ are eligible to receive loans,  
          technical assistance, and free product marketing. Authorization  
          for the RMDZs sunset on July 1, 2021.
          Loans and other RMDZ activities are funded by the subaccount,  
          which received seed money from the Integrated Waste Management  
          Account, and receives ongoing revenues from loan repayments and  
          interest. The subaccount is continuously appropriated to  
          CalRecycle.


          The Architectural Paint Recovery Program requires a manufacturer  
          of architectural point or the designated stewardship  
          organization to submit an architectural paint stewardship plan  
          to CalRecycle which develops and implements a recovery program  
          to reduce, reuse, and manage postconsumer architectural paint.  
          Beginning September 1, 2013, a manufacturer or architectural  
          paint sold in this state must submit an annual report to  
          CalRecycle describing its architectural paint recovery efforts.




          Proposed Law:  
            This bill would authorize CalRecycle to expend the subaccount  
          to reimburse local governments for promotional activities for  
          RMDZs, including training, outreach, development of written  
          promotional materials, and technical analysis of feedstock  
          availability.
          This bill would also change the annual reporting due date for  
          the architectural extended producer responsibility collection  
          program from September 1 to November 1 beginning in 2016.




          Staff  
          Comments:  According to CalRecycle, regarding the efforts to  








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          develop manufacturing facilities within the RMDZs, "Developing  
          such facilities is a critical component of CalRecycle's efforts  
          to achieving 75 percent recycling by 2020 and the state's  
          greenhouse gas reduction goals.  Attracting, siting, and  
          permitting such facilities, as well as finding appropriate  
          recycled feedstock, requires the services of Zone  
          Administrators. For the last 20 years, CalRecycle has provided  
          reimbursement payments, primarily from the RMDZ Loan Subaccount,  
          to the Zone Administrators for outreach services to promote the  
          RMDZ Loan Program.  However, a recent determination found that  
          PRC 42023.1, which authorizes the RMDZ Loan Subaccount funds  
          expenditures, does not give CalRecycle sufficient authority to  
          expend funds from the RMDZ Loan Subaccount to reimburse Zone  
          Administrators for outreach services."  
          This bill clarifies CalRecycle's statutory authority to make  
          reimbursement payments for RMDZ promotion activities. In the  
          past, the 36 zones have received between $3,500 and $10,000  
          annually for promotional activities. CalRecycle anticipates that  
          future promotional activities will likely total between $370,000  
          and $400,000 over the next three years. As this bill expands the  
          use of the subaccount, a continuously appropriated fund, this  
          bill makes an appropriation. 




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