Chapter 4. Resource Conservation Programs
Article 1.1. Recycling Market Development Zone Low-Interest Revolving Loan Fund
Section 17930. Purpose of the Revolving Loan Fund.
Section 17931. Definitions.
(b) “Application” means the information an Applicant must provide to the Board when seeking a loan.
(c) “Board Loan Committee” or “Loan Committee” means the committee referred to and established in Section 17935.5 of this Chapter.
(d) “Borrower” means an Applicant whose application has been approved and who has executed a Loan Agreement.
(e) “Board” means California Integrated Waste Management Board.
(f) “CEQA” is the California Environmental Quality Act found in Public Resources Code Sections 21000, et seq.
(g) “Capital Improvements” means physical improvements to publicly owned land, including buildings, structures and fixtures or attachments of a permanent or semi-permanent nature, including large equipment, erected on and affixed to the land.
(h) “Designation” means a Zone Applicant has received written notification from the Board stating it has satisfactorily completed all the requirements for designation as a Recycling Market Development Zone.
(i) “Infrastructure” means the basic facilities, such as sewer, water, transportation, and utility systems.
(j) “Loan” means a loan from the Recycling Market Development Revolving Loan Subaccount or the California Tire Recycling Management Fund.
(k) “Loan Agreement” means a written agreement between a Borrower and the Board for a Loan made in accordance with this Article.
(l) “May” means a provision is permissive.
(m) “Must” means a provision is mandatory.
(n) “Onerous Debt” means debt with high interest rates and/or short terms that causes a negative impact on the Borrower's cash flow and jeopardizes the Borrower's ability to convert to or expand its diversion of recycled or secondary material.
(o) “Phase I Assessment” means an assessment to be completed by a specialized engineering or consulting firm that provides a professional opinion, based on obvious evidence, as to the past and potential usage, storage, handling, or disposal of materials within the property that have been or may be toxic or hazardous, or may cause violations of state and/or federal laws, rules, or regulations pertaining to soil and water quality; and to identify past and potential off-site contaminant sources that did have, or may have an adverse environmental impact on the property. The assessment may be performed at the time of loan application or at any time during the life of the loan, as determined necessary by the Board. Hazardous materials and wastes that are to be identified include those meeting the definitions of Public Resources Code Section 40141 and Health and Safety Code Sections 25117 and 25501(k).
(p) “Postconsumer waste material” is defined in Public Resources Code Section 42002(b).
(q) “Project” means the activity for which a loan is requested.
(r) “Recycling Market Development Zone” or “Zone” is a geographic area as defined by Public Resources Code Section 42002(d).
(s) “Reuse” means to take a product, rather than a material, which has served its useful life or is factory defective, and provide some new value to the product, by reconditioning, reprocessing, or some other process which makes the product usable again for its original intended purpose.
(t) “Secondary waste material” is defined in Public Resources Code Section 42002(f).
(u) “Source reduction” is defined in Public Resources Code Section 40196.
(v) “Value added product” means an item which has increased in value or changed its character or composition through a manufacturing or reuse process. Collecting, sorting and/or baling of recycled or recovered materials for convenience or ease of transportation does not constitute adding value.
(w) “Zone administrator” is defined in Section 17901(j) of this Chapter.
Section 17932. Eligible Applicants.
(a) Businesses and not-for-profit organizations who:
(b) Local governments or agencies who seek to provide infrastructure and/or capital improvements in support of organizations referred to Subsection (a) of this section.
17932.1 Tire Recycling Projects.
Section 17933. Priority Projects.
(a) Demonstrate an ability to repay the loan;
(b) Increase market demand for the secondary or postconsumer waste material used in the project;
(c) Satisfy additional statewide recycling market development objectives as described in Section 17909 of this Chapter; and
(d) Satisfy additional priorities that are determined by the Board.
Section 17934. Loan Amounts.
Section 17934.1. Uses of Funds.
(b) For eligible local governments or agencies, loan funds shall be used only for publicly owned infrastructure and capital improvements located within the Zone which directly support recycling based business activities that would be eligible for a Loan.
Section 17934.3. Fees.
Section 17934.5. Interest Rate.
(a) The interest rate for loans is determined by the Board and is based on, but may vary from, the Surplus Money Investment Fund (SMIF) rate. The Board, as it deems appropriate, may adjust the interest rate semiannually, after the SMIF rate is announced by the Controller's Office in January and July of each year. The Board shall keep the interest rate as low as possible, consistent with current market conditions and the long-term sustainability of the Recycling Market Development Revolving Loan Program.
(b) The interest rate for loans funded through leveraging programs pursuant to Article 1.2 will be negotiated between the Board, the leveraging entity, and if applicable the lender.
Section 17935. Application Process.
(b) Applicants shall not submit applications for approval by the Board unless a Zone has received designation or redesignation status, as defined in Section 17901(d) of this Chapter.
(c) The applicant may submit a pre-application, as determined by the Board, to obtain a rapid evaluation of applicant's or a project's eligibility, prior to submitting a full application.
(d) The Applicant must submit an application with original signatures to the Board.
Section 17935.1. Application Content.
Additional information required from businesses and not-for-profit organizations is described in subsection (b) below. Local government or agency applicants must also provide the information requested in subsections (b) and (c) below.
(b) Applicant shall provide any further information or documentation deemed necessary by the Board to determine the creditworthiness of the Applicant, or the Applicant's ability to secure and repay the loan.
(c) Applications from local governments or agencies must contain the following additional information:
Section 17935.2 Loan Agreement.
(a) The interest rate of the loan as specified in Section 17934.5 of this Article.
(b) The term of the loan shall not exceed 10 years when collateralized by assets other than real estate, or not more than 15 years when partially or wholly collateralized by real estate.
(c) A description of the security and conditions.
(d) Timeframes for complying with the conditions of loan closing and any special conditions that must be satisfied prior to, or covenants which must be complied with after, the disbursement of funds.
(e) Identification of what is considered an event of default, including a provision that, upon failure to comply with the loan agreement, or if any information provided by the Applicant is found to be untrue, any remaining unpaid amount of the loan, with accrued interest, will be immediately due and payable, upon determination by the Board.
(f) A provision that the Borrower agrees to waive any claims against and to indemnify and hold harmless the State of California, including the California Integrated Waste Management Board, from and against any and all claims, costs, and expenses stemming from operation, maintenance, or environmental degradation at the site.
(g) Proof of adequate insurance for the business, naming the Board as loss payee, and when appropriate, naming the Board as additional insured, up to the amount of the loan.
(h) Submission of borrower's and guarantor's financial statements and tax returns, diversion reports, business insurance, and worker's compensation insurance, upon request by the Board.
(i) Any other provision needed to properly analyze and document a loan deemed necessary by the Board.
he Public Resources Code.
Section 17935.3 Process For Preliminary Review.
(a) Send a letter to the Applicant indicating that the application is incomplete, or that the Applicant and/or Applicant's project is ineligible for a loan, and specifying the steps, if any, which the Applicant may take to correct identified deficiencies; or
(b) Notify the Applicant by letter that the Applicant and/or Applicant's project is eligible for a loan, and that the application is complete and shall be evaluated by the Board staff.
Section 17935.4 Process For Board Staff Review.
(b) Where additional assistance may be needed from the Loan Committee for a determination, staff may forward those applications and analysis to the Loan Committee without a recommendation.
(c) Where the Applicant does not meet the criteria set forth in subsection (a), the Applicant will be notified in writing of its failure to meet the criteria and the process for appeal of the decision.
Section 17935.5. Establishment of the Loan Committee.
(a) A Loan Committee is hereby established to assist the Board in meeting the goals of the Program.
(b) The Loan Committee shall be composed of not more than nine individuals appointed by the Board.
(c) The Loan Committee shall be comprised of a balanced cross-section of individuals from the commercial lending community, both public and private sectors, from throughout the state who demonstrate expertise in financial analysis and credit evaluation.
(d) Members of the Loan Committee shall each be appointed to a three-year term, except that the newly added members terms may be adjusted so that a staggered schedule of terms is established where not more than four members terms shall expire during any single calendar year.
(e) Vacancies shall be filled using the same procedures as used for the initial appointments, and shall be filled for the remaining portion of the respective terms.
Section 17935.55 Process For Loan Committee Review
(b) The Loan Committee shall evaluate the staff analysis of loan requests presented by Board staff pursuant to the Review Process of section 17935.4 of this Article.
(c) The Loan Committee shall recommend applications for approval based only on their financial soundness and their ability to meet the underwriting criteria as described in Section 17935.4(a) of this Article.
(d) The Loan Committee may advise the Board as requested on other aspects of the loan program.
Section 17935.6 Board Approval
(b) The Board's loan commitment shall be in effect for a period of 90 days following Board approval. The loan commitment may be extended, for cause, for an additional 90 days. Extension of the loan commitment beyond the second 90 day period shall occur only if agreed to by both the Board and the Applicant.
Section 17936. Auditing of Expenditure of Loan Proceeds
Section 17937. Repealed.
Section 17938. Repealed.
Section 17939. Repealed.
Legal Office: Dona.Sturgess@calrecycle.ca.gov (916) 341-6066