BILL ANALYSIS
AB 1581
Page 1
Date of Hearing: May 4, 2009
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Nancy Skinner, Chair
AB 1581 (Committee on Natural Resources) - As Amended: April
23, 2009
SUBJECT : Solid waste: recycling market development
SUMMARY : Authorizes local governments to use additional funding
sources for participation in the Recycling Market Development
Zone (RMDZ) program and grants local governments the option to
rescind the designation of an RMDZ.
EXISTING LAW , under the California Integrated Waste Management
Act of 1989:
1)Establishes a Market Development Program to assist local
governments in meeting the state's 50% diversion requirement
and requires the California Integrated Waste Management Board
(CIWMB) to develop a comprehensive market development plan to
stimulate market demand for postconsumer materials generated
in California.
2)Establishes the RMDZ Program within CIWMB that works with
local zone administrators to establish RMDZs throughout
California to incentivize recycling businesses.
3)Establishes the Recycling Market Development Revolving Loan
Program (loan program) to provide loans to recycling
businesses located in RMDZs. Establishes the Recycling Market
Development Revolving Loan Subaccount in the Integrated Waste
Management Account and continuously appropriates funds
deposited in the subaccount to CIWMB for loans.
4)Establishes a cap of $2 million per loan and prohibits loan
funds from exceeding three-fourths the total cost of the
project.
5)Sunsets the above provisions on July 1, 2011, and repeals them
as of January 1, 2012.
THIS BILL :
1)States legislative intent encouraging cities and counties to
AB 1581
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propose RMDZs to stimulate economic development and green
jobs.
2)Authorizes local governing bodies to rescind designation of an
RMDZ.
3)Authorizes local governing bodies to receive any available
economic incentives to fund RMDZ designation.
FISCAL EFFECT : This bill is nonfiscal.
COMMENTS : The primary purpose of the RMDZ program is to help
local governments expand existing, or establish new, local and
regional markets for recycled materials. It offers a variety of
local and state resources, as well as business incentives to
recycling manufacturers. The RMDZ loans are one of the
cornerstones of the program. Loans can be used by manufacturers
or other business entities to enhance their ability to expand
local recycled-content markets. Local governments benefit from
the program by increased collection and recycling, increased
local economic development, and the creation of green jobs. The
RMDZ loan program has awarded 153 loans totaling over $100
million to 120 businesses. These businesses divert
approximately 4 million tons annually from landfills and employ
almost 2,000 Californians.
In the 1990s, CIWMB designated 40 RMDZs modeled after the
similar California Enterprise Zone program. However, between
2003 and 2006, 7 RMDZs chose to discontinue their participation
in the program. In March of this year, CIWMB approved a new
designation cycle in an attempt to bring the number of RMDZs
back up to 40.
The current economic crisis has resulted in a severe drop in
recycled content materials; it has also caused significant job
losses throughout the state. This bill is intended to encourage
local governments to designate new RMDZs by giving them
additional flexibility over their participation in the program
through additional control over the length of participation and
the option to use additional funding sources.
1)Related legislation
SB 390 (Kehoe) creates a two-tiered loan program that allows for
loans exceeding $2 million if there is sufficient money in the
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Subaccount and if the loan does not exceed three-fourths of the
project cost; establishes a sunset provision for the new, larger
loans in July 1, 2016; and, extends the sunset provisions for
the primary loan program from July 1, 2011 to July 1, 2021. SB
390 is pending hearing in the Senate Appropriations Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Recycling Market Development Zones
Northern California Recycling Association
Opposition
None on file
Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916)
319-2092