BILL ANALYSIS                                                                                                                                                                                                    

                                                                  SB 390
                                                                  Page  1

          SB 390 (Kehoe)
          As Amended  August 20, 2010
          Majority vote

           SENATE VOTE  :35-0  
           NATURAL RESOURCES   7-0         APPROPRIATIONS      17-0        
          |Ayes:|Chesbro, Gilmore,         |Ayes:|Fuentes, Conway,          |
          |     |Brownley,                 |     |Bradford,                 |
          |     |De Leon, Hill, Huffman,   |     |Huffman, Coto, Davis, De  |
          |     |Logue                     |     |Leon, Gatto, Hall,        |
          |     |                          |     |Harkey, Miller, Nielsen,  |
          |     |                          |     |Norby, Skinner, Solorio,  |
          |     |                          |     |Torlakson, Torrico        |
          |     |                          |     |                          |
           SUMMARY :  Extends the sunset on California's Recycling Market  
          Development Zone (RMDZ) Program from July 1, 2011 to July 1,  
          2021, and makes related technical and clarifying changes.  

           EXISTING LAW  , under the California Integrated Waste Management  
          Act (Act) of 1989: 

          1)Requires each city or county source reduction and recycling  
            element to include an implementation schedule that shows a  
            city or county must divert 50% of solid waste from landfill  
            disposal or transformation by January 1, 2000, through source  
            reduction, recycling, and composting activities.

          2)Establishes a Market Development Program to assist local  
            governments in meeting the requirements of #1 above and  
            requires the Department of Resources Recovery and Recycling  
            (DRRR) to develop a comprehensive market development plan to  
            stimulate market demand for post consumer waste materials  
            generated in California. 

          3)Establishes the RMDZ Program within DRRR that works with local  
            zone administrators to establish zones throughout California  
            to encourage recycling businesses through a variety of local  


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          4)Establishes the Recycling Market Development Revolving Loan  
            Program (loan program) to provide loans to recycling  
            businesses as specified.

          5)Establishes the Recycling Market Development Revolving Loan  
            Subaccount (Subaccount) in the Integrated Waste Management  
            Account and continuously appropriates funds deposited in the  
            Subaccount to DRRR for making loans for purposes of the RMDZ  
            Program.  The funds are from the state solid waste tipping  
            fee, not the General Fund. 

          6)Establishes a per loan cap of $2 million, not to exceed  
            three-fourths the total cost of the project.

          7)Makes the provisions regarding the loan program, the creation  
            of the Subaccount, and expenditures from the Subaccount  
            inoperative on July 1, 2011, repeals them as of January 1,  
            2012, and provides for disposition of funds remaining after  
            sunset and repeal.

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee, cost pressures of an unknown amount during the years  
          2010-11 through 2021-22 on other programs funded from the IWMA  
          to the extent the continuation of the RMDZ Program results in  
          those other programs receiving less IWMA funds than they  
          otherwise would.

           COMMENTS  :  According to the author, the RMDZ Loan Program  
          provides direct low-interest loans to businesses and non-profit  
          organizations located in RMDZs that increase diversion of  
          non-hazardous solid waste from California landfills and that  
          promote market demand for secondary and post consumer materials.  
           The loan program encourages banks to jointly fund projects.  In  
          addition, the businesses receiving loans get free technical  
          assistance in permitting, business plans, feedstock, and  
          identifying potential markets.  This bill will preserve a  
          financing program specifically for California recycling  
          manufacturers and provides stability to borrowers.  

          The RMDZ Program was established by SB 1322 (Bergeson), Chapter  
          1096, Statutes of 1989.  The goal for the program is to further  
          the establishment of local and regional markets for the  
          increased materials being collected by local jurisdictions.  In  
          order to accomplish this goal, DRRR must provide the right  
          combination of technical/financial incentives and resources to  


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          attract/retain recycling manufacturers; ensure local Zone  
          Administrators are adequately trained; ensure the most efficient  
          use of limited state resources; and, provide RMDZ opportunities  
          to as many local jurisdictions as possible.  The program is  
          intended to combine recycling and sustainability efforts with  
          economic development.

          There are currently 33 zones located throughout the state.   
          These zones include 220 cities and 29 counties (46% of all  
          jurisdictions statewide).  The RMDZs cover approximately 85,000  
          square miles, or 52% of California, and represent almost 20  
          million Californians (approximately 54% of the total  

          The initial funding for the Program came from the Integrated  
          Waste Management Account; the ongoing loan program is funded by  
          loan repayments.

          Analysis Prepared by  :  Elizabeth MacMillan / NAT. RES. / (916)  

                                                                FN: 0006382