BILL ANALYSIS
AB 1507
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2009-2010 Regular Session
BILL NO: AB 1507
AUTHOR: Block
AMENDED: As introduced
FISCAL: Yes HEARING DATE: June 22, 2009
URGENCY: No CONSULTANT: Rachel Machi
Wagoner
SUBJECT : HAZARDOUS MATERIALS: METAL PLATING
FACILITIES
SUMMARY :
Existing law :
1)Establishes, in the Business, Transportation and Housing
Agency (BTH), the Metal Plating Facility Loan Guarantee
Program.
2)Requires BTH to provide loan guarantees to chrome plating
facilities to help them upgrade or replace equipment in
order to comply with regulatory requirements and implement
additional pollution prevention measures.
3)Requires BTH to collaborate with state environmental
agencies and the eleven California Financial Development
Corporations in developing and implementing this program.
4)Requires applicants for the loan guarantees to be small
business owners of metal plating facilities.
5)Sunsets the loan guarantee program on January 1, 2012.
This bill :
1)Recasts the existing Metal Plating Facility Loan Guarantee
program from a loan program to a grant program and
establishes the Chrome Plating and Metal Finishing Pollution
Prevention Grant Program (grant program).
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2)Requires the Department of Toxic Substance Control (DTSC) to
operate the grant program.
3)Removes the existing January 1, 2012, sunset date.
COMMENTS :
1) Purpose of Bill . According to the author, despite the good
work developing, implementing and promoting the Metal
Plating Loan Guarantee Program, no metal finishing business
have joined the Model Shop Program nor have any utilized
the loan guarantee program. This is due in part to updated
regulatory standards and in part to the lack of incentives
created to make the program more enticing than traditional
business loans. By recasting the provisions of the Metal
Plating Facility Loan Guarantee Program into a grant
program, AB 1507 provides an incentive for small businesses
to join the Model Shop Program and assists metal plating
facilities upgrade, replace and purchase high performance
environmental and pollution control equipment and
technology.
2) Related Legislation .
AB 2536 (Nunez) of 2008 authorized BTH to offer rebates of
10% of the loan guarantee amount not to exceed $15,000 to
loan guarantee recipients that complete pollution
prevention improvements and meet the program requirements.
AB 2536 was held on the Senate Appropriations Committee
suspense file.
AB 721 (Nunez) Chapter 695, Statutes of 2005 required: a)
BTH, in collaboration with other state entities, to
establish a loan guarantee program for chrome plating
facilities; and, b) DTSC to establish the Model Shop
Program.
AB 139 (Assembly Budget Committee) Chapter 74, Statutes of
2005, a budget trailer bill, created the Chrome Plate
Pollution Prevention Fund (CPPP Fund) to receive deposits
of public or private funds for expenditure, upon
appropriation by the Legislature, by the BTH. AB 139 also
transferred all money in the Hazardous Waste Reduction Loan
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(HWRL) Account on January 1, 2006 ($2.2 million) to the
CPPP Fund, and required future loan repayments to the HWRL
Account to be transferred to the CPPP Fund. Money in the
CPPP Fund is intended to back up any loan guarantees
provided to an eligible small business and to pay BTH
administrative expenses (about $300,000 annually).
Since the loan guarantee program went into effect in
January 2006, no CPPP Fund money has been appropriated to
provide financial assistance in any form. CPPP Fund
appropriations have been limited to $278,000 in 2006-07,
$283,000 in 2007-08, $324,000 in 2008-09, and a proposed
$312,000 in 2009-10.
3) Background . There are approximately 900 chrome plating
shops in California that conduct electro-plating. This
includes shops where electro-plating is a primary and
secondary activity, as well as shops manufacturing circuit
boards. According to data from the DTSC, the plating and
polishing industry sector is the second highest hazardous
waste generator in California - producing nearly 70,000
tons of hazardous waste per year. Only the petroleum
refining industry produces more hazardous waste.
4) Amendments needed . Neither the bill nor current statute
provides a definition of "pollution prevention
improvement". The bill needs a definition to provide
clarity as to what type of improvements would be eligible
for a grant under this legislation.
As there is a finite amount of money in the CPPP Fund, the
sunset that would be removed by this legislation should be
retained.
In order to ensure equity among the grants provided, a cap
should be put on the amount of each grant.
As this bill would change the program from a loan program to a
grant program, the funds provided should be used to make
improvements that are above and beyond what is required for
compliance. The bill should be amended to strike "meet"
from Section 42101.1 (d) of the Public Resources Code.
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5) Arguments in support . Supporters contend that AB 1507
would facilitate industry member efforts to implement
additional pollution prevention opportunities by better
assisting metal plating facilities in obtaining financial
assistance to install and implement equipment to enhance
their efforts to protect the environment.
SOURCE : Assemblymember Block
SUPPORT : Metal Finishing Association of Northern
California
Metal Finishing Association of Southern
California
OPPOSITION : None on file