BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular SB 662 (Committee on Environmental Quality) - Recycling ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: February 27, 2015 |Policy Vote: E.Q. 7 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: April 27, 2015 |Consultant: Marie Liu | | | | ----------------------------------------------------------------- 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 SB 662 (Committee on Environmental Quality) Page 1 of ? 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 SB 662 (Committee on Environmental Quality) Page 2 of ? 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. -- END --