BILL NUMBER: SB 1535	CHAPTERED
	BILL TEXT

	CHAPTER   615
	FILED WITH SECRETARY OF STATE   SEPTEMBER 19, 1996
	APPROVED BY GOVERNOR   SEPTEMBER 18, 1996
	PASSED THE SENATE   AUGUST 29, 1996
	PASSED THE ASSEMBLY   AUGUST 28, 1996
	AMENDED IN ASSEMBLY   AUGUST 21, 1996
	AMENDED IN ASSEMBLY   JULY 7, 1996
	AMENDED IN SENATE   MAY 29, 1996
	AMENDED IN SENATE   MAY 7, 1996

INTRODUCED BY  Senator Killea
   (Principal coauthor: Assembly Member Kuykendall) and
   (Coauthor: Senator Dills)

                        FEBRUARY 14, 1996

   An act to amend Section 42010 of the Public Resources Code,
relating to solid waste, and making an appropriation therefor.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1535, Killea.  Solid waste:  recycling market development loan
programs.
   Existing law, the California Integrated Waste Management Act of
1989, regulates the management and handling of solid waste and is
administered by the California Integrated Waste Management Board.
   The act, until July 1, 1997, provides for the designation of
recycling market development zones, provides for a recycling market
development loan program, and creates the Recycling Market
Development Revolving Loan Subaccount in the Integrated Waste
Management Account.
   The act requires the board to report on its loan program in the
annual report that the board is required to file on or before March
31, 1996, with the Legislature, and to report on its progress in
developing and implementing the market development plan in the annual
report.
   This bill would continuously appropriate the funds deposited in
the subaccount to the board for making loans pursuant to the bill.
The bill would specify additional terms and conditions for making
loans and related powers of the board.
   The bill would specify elements of the report.
   The bill would extend the operative date of those provisions until
July 1, 2006, but would not extinguish any loan obligation or the
authority of the state to seek collection of a loan.
   Appropriation:  yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 42010 of the Public Resources Code is amended
to read:
   42010.  (a) The local governing body may, either by ordinance or
resolution, upon the recommendation of the appropriate land use
planning agency, propose eligible parcels of property within its
jurisdiction as a recycling market development zone.
   (b) The proposal of a recycling market development zone shall be
based upon the following findings by the local governing body:
   (1) The current waste management practices and conditions are
favorable to the development of postconsumer waste material markets.

   (2) The designation as a recycling market development zone is
necessary to assist in attracting private sector recycling
investments to the area.
   (c) (1) The Recycling Market Development Revolving Loan Subaccount
is hereby created in the account for the purpose of providing loans
for purposes of the Recycling Market Development Revolving Loan
Program established pursuant to this article.
   (2) Notwithstanding Section 13340 of the Government Code, the
funds deposited in the subaccount are hereby continuously
appropriated to the board without regard to fiscal year for making
loans pursuant to this article.
   (3) The board may, upon appropriation by the Legislature in the
annual Budget Act, expend interest earnings on funds in the
subaccount for administrative expenses incurred in carrying out the
Recycling Market Development Revolving Loan Program.
   (4) The money from any loan repayments and fees, including, but
not limited to, principal and interest repayments, fees and points,
recovery of collection costs, income earned on any asset recovered
pursuant to a loan default, and funds collected through foreclosure
actions, shall be deposited in the subaccount.
   (5) All interest accruing on interest payments from loan
applicants shall be deposited in the subaccount.
   (6) The board may make low-interest loans to local governing
bodies and private business entities within a recycling market
development zone from money in the subaccount for the purpose of
assisting the board and local agencies in complying with Section
40051 and to assist counties and cities in complying with Section
41780.
   (7) The board shall establish and collect fees for applications
for loans authorized by this section.  The application fee shall be
set at a level that is sufficient to fund the board's cost of
processing applications for loans.  In addition, the board shall
establish a schedule of fees, or points, for loans which are entered
into by the board, to fund the board's administration of the
revolving loan program.
   (8) The board may, upon appropriation by the Legislature in the
annual Budget Act, expend money in the subaccount for the
administration of the Recycling Market Development Revolving Loan
Program.  In addition, the board may fund administration of the
revolving loan program from the account upon appropriation by the
Legislature in the annual Budget Act.  However, funding for the
administration of the revolving loan program from the account shall
be provided only if there are not sufficient funds in the subaccount
to fully fund administration of the program.
   (9) The board, pursuant to subdivision (a) of Section  47901, may
set aside funds for the purposes of paying costs necessary to protect
the state's position as a lender-creditor.  These costs shall be
broadly construed to include, but not be limited to, foreclosure
expenses, auction fees, title searches, appraisals, real estate
brokerage fees, attorney fees, mortgage payments, insurance payments,
utility costs, repair costs, removal and storage costs for
repossessed equipment and inventory, and additional expenditures to
purchase a senior lien in foreclosure or bankruptcy proceedings.
   (d) Loans made pursuant to subdivision (c) shall be subject to all
of the following requirements:
   (1) The terms of any approved loan shall be specified in a loan
agreement between the borrower and the board.  The loan agreement
shall include a requirement that the failure to comply with the
agreement shall result in any remaining unpaid amount of the loan,
with accrued interest, being immediately due and payable.
Notwithstanding any term of the agreement, any recipient of a loan
that the board approves shall repay the principal amount, plus
interest on the basis of the rate of return for money in the Surplus
Money Investment Fund at the time of the loan commitment.  Except as
provided in subdivision (g), all money received as repayment and
interest on loans made pursuant to this section shall be deposited in
the subaccount.
   (2) The term of any loan made pursuant to this section shall be
not more than 10 years.
   (3) The board shall approve only those loan applications which
demonstrate the applicant's ability to repay the loan.  The highest
priority for funding shall be given to projects which demonstrate
that the project will increase market demand for recycling the
project's type of postconsumer waste material.
   (4) The board shall finance not more than one-half of the cost of
the project, or not more than one million dollars ($1,000,000) for
loans to the project, whichever is less.
   (5) The board shall encourage applicants to seek participation
from private financial institutions or other public agencies.  For
purposes of enabling the board and local agencies to comply with
Sections 40051 and 41780, the board may, on a pilot basis,
participate, in an amount not to exceed five hundred thousand dollars
($500,000), in the Capital Access Loan Program as provided in
Article 8 (commencing with Section 44559) of Chapter 1 of Division 27
of the Health and Safety Code.
   (6) The Department of Finance may audit the expenditure of the
proceeds of any loan made pursuant to this section.
   (e) Upon authorization by the Legislature in the annual Budget
Act, the Controller shall transfer the sum of five million dollars
($5,000,000) from the account to the subaccount for the purpose of
making loans pursuant to this section.  Commencing July 1, 2000, upon
authorization by the Legislature in the annual Budget Act, the
amount of the funds transferred pursuant to this section shall be a
sum not to exceed five million dollars ($5,000,000) as necessary to
meet anticipated loan demand.  Those amounts shall be a loan to the
subaccount, repayable with interest to the account at the rate of
return for money in the Surplus Money Investment Fund.
   (f) The board shall, as part of the annual report to the
Legislature, pursuant to Section 40507, include a report on the
performance of the Recycling Market Development Revolving Loan
Program, including the number and size of loans made, characteristics
of loan recipients, projected loan demand, and the cost of
administering the program.
   (g) All money remaining in the subaccount on July 1, 2006, and all
money received as repayment and interest on loans shall, as of July
1, 2006, be transferred to the account and any money due and
outstanding on loans as of July 1, 2006, shall be repaid to the board
and deposited by the board in the account until paid in full, except
that, upon authorization by the Legislature in the annual Budget
Act, interest earnings may be expended for administrative costs
associated with the collection of outstanding loan accounts.
   (h) (1) Except as provided in paragraph (2), this section shall
become inoperative on July 1, 2006, and as of January 1, 2007, is
repealed, unless a later enacted statute, which becomes effective on
or before January 1, 1998, deletes or extends the dates on which it
becomes inoperative and is repealed.
   (2) The repeal of this section pursuant to paragraph (1) shall not
extinguish any loan obligation or the authority of the state to
pursue appropriate actions for the collection of a loan.