BILL NUMBER: ABX8 7	AMENDED
	BILL TEXT

	AMENDED IN SENATE  FEBRUARY 17, 2010

INTRODUCED BY   Committee on Budget (Evans (Chair), Arambula, Beall,
Blumenfield, Brownley, Carter, Chesbro, De La Torre, Feuer,
Hernandez, Hill, Huffman, Monning, Ruskin, and Swanson)

                        JANUARY 15, 2010

    An act relating to the Budget Act of 2009.  
An act to amend Sections 14560, 14580, and 14581 of, and to amend,
repeal, and add Section 14574 to, the Public Resources Code, and to
amend Sections 13476 and 13480 of the Water Code, relating to the
environment, making an appropriation therefor, and declaring the
urgency thereof, to take effect immediately. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 7, as amended, Committee on Budget.  Budget Act of
2009.   Environmental pollution: program funding. 

   (1) Existing law, the California Beverage Container Recycling and
Litter Reduction Act (act), requires a distributor to pay a
redemption payment no later than the 3rd month following the sale of
a beverage container to the Division of Recycling in the Department
of Resources Recycling and Recovery. The division is required to
deposit those amounts in the California Beverage Container Recycling
Fund. Under existing law, the money in the fund is continuously
appropriated to the division to pay, among other things, handling
fees to provide an incentive for the redemption of empty beverage
containers in convenience zones. A violation of the act is a crime.
 
   This bill would instead require, between February 1, 2010, and
June 30, 2012, a distributor to submit the redemption payment to the
department not later than the 2nd month following the sale, thereby
imposing a state-mandated local program by changing the definition of
a crime. The bill would require the department, on or before January
10, 2012, to submit to the relevant policy and budget committees of
the Legislature an assessment of the effect of ending the bimonthly
payment on the solvency of the fund. The bill would revise the
conditions under which a distributor may make an annual payment of
redemption payments.  
   (2) Existing law provides that after setting aside funds for the
payment of refund values and administrative fees, and for a reserve
for contingencies, the remaining moneys in the California Beverage
Container Recycling Fund are continuously appropriated to the
division for expenditure for designated programs, grants, and fee
payments.  
   This bill would prohibit the department from expending, for the
2010 and 2011 calendar years, funds annually authorized for grants
for beverage container recycling and litter reduction programs, the
statewide public education and information campaign, grants for
recycling market development, and grants for certain programs. The
bill would revise certain amounts that the department is authorized
to expend from those moneys remaining in the funds.  
   The bill would require the department, subject to the availability
of funds, to retroactively pay in full any payments that have been
proportionally reduced during the period of January 1, 2010, through
June 30, 2010.  
   Since the bill would revise the conditions under which funds are
expended from a continuously appropriated fund, the bill would make
an appropriation.  
   (3) Existing law continuously appropriates state and federal funds
in the State Water Pollution Control Revolving Fund to the State
Water Resources Control Board for loans and other financial
assistance for the construction of publicly owned treatment works by
a municipality, the implementation of management programs, the
development and implementation of a conservation and management plan,
and other related purposes in accordance with the federal Clean
Water Act. Existing law, for the purposes of these provisions,
defines "financial assistance" to include grants for eligible
projects to the extent those grants are funded by a specified federal
law. Existing law authorizes the state board to make loans for
eligible projects at or below market interest rates.  
   This bill would authorize the state board to make loans at
negative interest rates and would allow for principal forgiveness to
the extent authorized and funded by a federal capitalization grant.
The bill would revise the term "financial assistance" to include
other assistance that is authorized by a federal capitalization grant
to the extent authorized and funded by that grant. By expanding the
purposes for which moneys in the continuously appropriated revolving
fund may be expended, the bill would make an appropriation. 

   (4) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that no reimbursement is required by this
act for a specified reason.  
   (5) The California Constitution authorizes the Governor to declare
a fiscal emergency and to call the Legislature into special session
for that purpose. The Governor issued a proclamation declaring a
fiscal emergency, and calling a special session for this purpose, on
January 8, 2010.  
   This bill would state that it addresses the fiscal emergency
declared by the Governor by proclamation issued on January 8, 2010,
pursuant to the California Constitution.  
   (6) This bill would declare that it is to take effect immediately
as an urgency statute.  
   This bill would express the intent of the Legislature to enact
statutory changes relating to the Budget Act of 2009. 

   The California Constitution authorizes the Governor to declare a
fiscal emergency and to call the Legislature into special session for
that purpose. The Governor issued a proclamation declaring a fiscal
emergency, and calling a special session for this purpose, on January
8, 2010.  
   This bill would state that it addresses the fiscal emergency
declared by the Governor by proclamation issued on January 8, 2010,
pursuant to the California Constitution. 
   Vote:  majority   2/3  . Appropriation:
 no   yes  . Fiscal committee:  no
  yes  . State-mandated local program:  no
  yes  .


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

   SECTION 1.    Section 14560 of the   Public
Resources Code   is amended to read: 
   14560.  (a) (1) Except as provided in paragraph (3), a beverage
distributor shall pay the department, for deposit into the fund, a
redemption payment of four cents ($0.04) for a beverage container
sold or offered for sale in this state by the distributor.
   (2) A beverage container with a capacity of 24 fluid ounces or
more shall be considered as two beverage containers for purposes of
redemption payments paid pursuant to paragraph (1).
   (3) On and after July 1, 2007, the amount of the redemption
payment and refund value for a beverage container with a capacity of
less than 24 fluid ounces sold or offered for sale in this state by a
dealer shall equal five cents ($0.05) and the amount of redemption
payment and refund value for a beverage container with a capacity of
24 fluid ounces or more shall be ten cents ($0.10), if the aggregate
recycling rate reported pursuant to Section 14551 for all beverage
containers subject to this division is less than 75 percent for the
12-month reporting period from January 1, 2006, to December 31, 2006,
or for any calendar year thereafter.
   (b) Except as provided in subdivision (c), a beverage container
sold or offered for sale in this state has a refund value of four
cents ($0.04) if the beverage container has a capacity of less than
24 fluid ounces and eight cents ($0.08) if the beverage container has
a capacity of 24 fluid ounces or more.
   (c) Notwithstanding subdivision (b), the department may, on and
after January 1, 2007, but not after July 1, 2007, increase the
amount of the refund value specified in subdivision (b), by no more
than one cent ($0.01), if the container has a capacity of less than
24 fluid ounces, and by two cents ($0.02) if the container has a
capacity of 24 fluid ounces or more, if the department determines, as
specified in subdivision (f) of Section 14581, there are sufficient
moneys remaining in the fund to make these increased payments.
   (d) (1) The department shall  periodically 
review the fund  at least once every three months  to ensure
that there are adequate funds in the fund to pay refund values and
other disbursements required by this division.
   (2) If the department determines, pursuant to a review made
pursuant to paragraph (1), that there may be inadequate funds to pay
the refund values and necessary disbursements required by this
division, the department shall immediately notify the Legislature of
the need for urgent legislative action.
   (3) On or before 180 days  , but not less than 90 days, 
after the notice is sent pursuant to paragraph (2), the department
may reduce or eliminate expenditures, or both, from the fund as
necessary, according to the procedure set forth in Section 14581, to
ensure that there are adequate funds in the fund to pay the refund
values and other disbursements required by this division.
   (e) This section does not apply to a refillable beverage
container. 
   (f) The repeal and reenactment of this section by Chapter 815 of
the Statutes of 1999 do not affect any obligations or penalties
imposed by this section, as it read on January 1, 1999. 
   SEC. 2.    Section 14574 of the   Public
Resources Code   is amended to read: 
   14574.  (a) (1) A distributor of beverage containers shall pay to
the department the redemption payment for every beverage container,
other than a refillable beverage container, sold or transferred to a
dealer, less 1.5 percent for the distributor's administrative costs.

   (2) The payment made by a distributor shall be made not later than
the last day of the third month following the sale. The distributor
shall make the payment in the form and manner that the department
prescribes.  
   (2) Between February 1, 2010, and June 30, 2012, inclusive, the
payment made by a distributor shall be made not later than the last
day of the second month following the sale. The distributor shall
make the payment in the form and manner that the department
prescribes. 
   (b) (1) Notwithstanding subdivision (a), if a distributor displays
a pattern of operation in compliance with this division and the
regulations adopted pursuant to this division, to the satisfaction of
the department, the distributor may make a single annual payment of
redemption payments  ,  if the  distributor
meets either of the following requirements:  
distributor's projected redemption payment for a calendar year totals
less than seventy-five thousand dollars ($75,000).  
   (A) If the redemption payment and refund value is not increased
pursuant to paragraph (3) of subdivision (a) of Section 14560, the
distributor's projected redemption payment for a calendar year totals
less than fifty thousand dollars ($50,000).  
   (B) If the redemption payment and refund value is increased
pursuant to paragraph (3) of subdivision (a) of Section 14560, the
distributor's projected redemption payment for a calendar year totals
less than seventy-five thousand dollars ($75,000). 
   (2) An annual redemption payment made pursuant to this subdivision
is due and payable on or before February 1 for every beverage
container sold or transferred by the distributor to a dealer in the
previous calendar year.
   (3) A distributor shall notify the department of its intent to
make an annual redemption payment pursuant to this subdivision on or
before January 31 of the calendar year for which the payment will be
due. 
   (c) On or before January 10, 2012, the department shall submit to
the relevant policy and budget committees of the Legislature an
assessment of the effect of ending the bimonthly payment pursuant to
paragraph (2) of subdivision (a) on the solvency of the fund. The
assessment shall include data used to make the assessment, including
sales, recycling, and other relevant information.  
   (d)This section shall become inoperative on July 1, 2012, and, as
of January 1, 2013, is repealed, unless a later enacted statute, that
becomes operative on or before January 1, 2013, deletes or extends
the dates on which it becomes inoperative and is repealed. 
   SEC. 3.    Section 14574 is added to the  
Public Resources Code   , to read:  
   14574.  (a) (1) A distributor of beverage containers shall pay to
the department the redemption payment for every beverage container,
other than a refillable beverage container, sold or transferred to a
dealer, less 1.5 percent for the distributor's administrative costs.
   (2) The payment made by a distributor shall be made not later than
the last day of the third month following the sale. The distributor
shall make the payment in the form and manner that the department
prescribes.
   (b) (1) Notwithstanding subdivision (a), if a distributor displays
a pattern of operation in compliance with this division and the
regulations adopted pursuant to this division, to the satisfaction of
the department, the distributor may make a single annual payment of
redemption payments, if the distributor's projected redemption
payment for a calendar year totals less than seventy-five thousand
dollars ($75,000).
   (2) An annual redemption payment made pursuant to this subdivision
is due and payable on or before February 1 for every beverage
container sold or transferred by the distributor to a dealer in the
previous calendar year.
   (3) A distributor shall notify the department of its intent to
make an annual redemption payment pursuant to this subdivision on or
before January 31 of the calendar year for which the payment will be
due.
   (b) This section shall become effective on July 1, 2012. 
   SEC. 4.    Section 14580 of the   Public
Resources Code   is amended to read: 
   14580.  (a) Except as provided in subdivision (d), the department
shall deposit all amounts paid as redemption payments by distributors
pursuant to Section 14574 and all other revenues received into the
California Beverage Container Recycling Fund, which is hereby created
in the State Treasury. Notwithstanding Section 13340 of the
Government Code, the money in the fund is hereby continuously
appropriated to the department for expenditure without regard to
fiscal year for the following purposes:
   (1) The payment of refund values and administrative fees to
processors pursuant to Section 14573.
   (2) For a reserve for contingencies, which shall not be greater
than an amount equal to 5 percent of the total amount paid to
processors pursuant to Section 14573 during the preceding calendar
year, plus the interest earned on that amount.
   (b) The money in the fund may be expended by the department for
the administration of this division only upon appropriation by the
Legislature in the annual Budget Act.
   (c) After setting aside funds estimated to be needed for
expenditures authorized pursuant to this section, the department
shall set aside funds on a quarterly basis for the purposes specified
in Section 14581. Notwithstanding Section 13340 of the Government
Code, that money is hereby continuously appropriated to the
department, without regard to fiscal year, for the purposes specified
in Section 14581.
   (d) The department shall deposit all civil penalties or fines
collected pursuant to this division into the Penalty Account, which
is hereby created in the fund. The money in the Penalty Account may
be expended by the department only upon appropriation by the
Legislature, for purposes of this division. 
   (e) The Legislature finds and declares that the maintenance of the
fund is of the utmost importance to the state and that it is
essential that any money in the fund be used solely for the purposes
authorized in this division and should not be used, loaned, or
transferred for any other purpose. 
   SEC. 5.    Section 14581 of the   Public
Resources Code  is amended to read: 
   14581.  (a) Subject to the availability of funds, and pursuant to
subdivision (c), the department shall expend the moneys set aside in
the fund, pursuant to subdivision (c) of Section 14580, for the
purposes of this section: 
   (1) (A) On and after July 1, 2005, to June 30, 2006, inclusive, up
to thirty-one million dollars ($31,000,000) may be expended for that
fiscal year for the payment of handling fees pursuant to Section
14585.  
   (B) On and after July 1, 2006, to June 30, 2007, inclusive, up to
thirty-three million dollars ($33,000,000) may be expended for that
fiscal year for the payment of handling fees pursuant to Section
14585.  
   (C) On and after July 1, 2007, to June 30, 2008, inclusive, up to
thirty-five million dollars ($35,000,000) may be expended for that
fiscal year for the payment of handling fees pursuant to Section
14585.  
   (D) 
    (1)  For each fiscal year commencing July 1, 2008, the
department may expend the amount necessary to make the required
handling fee payment pursuant to Section 14585.
   (2) Fifteen million dollars ($15,000,000) shall be expended
annually for payments for curbside programs and neighborhood dropoff
programs pursuant to Section 14549.6.
   (3) (A) Fifteen million dollars ($15,000,000), plus the
proportional share of the cost-of-living adjustment, as provided in
subdivision (b), shall be expended annually in the form of grants for
beverage container litter reduction programs and recycling programs
issued to either of the following:
   (i) Certified community conservation corps that were in existence
on September 30, 1999, or that are formed subsequent to that date,
that are designated by a city or a city and county to perform litter
abatement, recycling, and related activities, if the city or the city
and county has a population, as determined by the most recent
census, of more than 250,000 persons.
   (ii) Community conservation corps that are designated by a county
to perform litter abatement, recycling, and related activities, and
are certified by the California Conservation Corps as having operated
for a minimum of two years and as meeting all other criteria of
Section 14507.5.
   (B) Any grants provided pursuant to this paragraph shall not
comprise more than 75 percent of the annual budget of a community
conservation corps. 
   (4) (A) On or after July 1, 2007, until June 30, 2008, for only
that fiscal year, up to twenty million dollars ($20,000,000) may be
expended in the form of competitive grants issued to community
conservation corps that are designated by a city or county, and that
meet both of the following criteria:  
   (i) Are certified by the California Conservation Corps as having
operated for a minimum of two years.  
   (ii) Meet all other requirements under Section 14507.5. 

   (B) The department shall prepare and adopt criteria and procedures
for evaluating grant applications on a competitive basis. Eligible
activities for the use of these funds shall include developing new
projects, or enhancing or assisting existing projects, to increase
beverage container recycling and increasing the quality of recycled
material at the following locations:  
   (i) Multifamily dwellings.  
   (ii) Schools.  
   (iii) Commercial, state, and local government buildings. 

   (iv) Bars, restaurants, hotels, and lodging establishments, and
entertainment venues.  
   (v) Parks and beaches.  
   (C) Any grants provided pursuant to this paragraph shall not
comprise more than 75 percent of the annual budget of a community
conservation corps.  
   (D) Any grants provided pursuant to this paragraph shall support
one-time capital improvement projects and shall not be used to
support ongoing staff activities.  
   (E) Any grant funds appropriated pursuant to this paragraph that
have not been awarded to a grantee prior to the end of the 2007-08
fiscal year shall revert to the fund.  
   (C) For the 2009-10 fiscal year only, the eight million two
hundred fifty thousand dollars ($8,250,000) appropriated to the
California Conservation Corps for certified local conservation corps
by Item 3340-101-0133 of the 2009-10 Budget Act, as added by Section
166 of Chapter 1 of the Fourth Extraordinary Session of the Statutes
of 2009, shall be in addition to the amounts expended pursuant to
paragraph (3).  
   (5) 
    (4)  (A) Ten million five hundred thousand dollars
($10,500,000) may be expended annually for payments of five thousand
dollars ($5,000) to cities and ten thousand dollars ($10,000) for
payments to counties for beverage container recycling and litter
cleanup activities, or the department may calculate the payments to
counties and cities on a per capita basis, and may pay whichever
amount is greater, for those activities.
   (B) Eligible activities for the use of these funds may include,
but are not necessarily limited to, support for new or existing
curbside recycling programs, neighborhood dropoff recycling programs,
public education-promoting beverage container recycling, litter
prevention, and cleanup, cooperative regional efforts among two or
more cities or counties, or both, or other beverage container
recycling programs.
   (C) These funds may not be used for activities unrelated to
beverage container recycling or litter reduction.
   (D) To receive these funds, a city, county, or city and county
shall fill out and return a funding request form to the 
Department of Conservation   department  . The form
shall specify the beverage container recycling or litter reduction
activities for which the funds will be used.
   (E) The  Department of Conservation  
department  shall annually prepare and distribute a funding
request form to each city, county, or city and county. The form shall
specify the amount of beverage container recycling and litter
cleanup funds for which the jurisdiction is eligible. The form shall
not exceed one double-sided page in length, and may be submitted
electronically. If a city, county, or city and county does not return
the funding request form within 90 days of receipt of the form from
the department, the city, county, or city and county is not eligible
to receive the funds for that funding cycle.
   (F) For the purposes of this paragraph, per capita population
shall be based on the population of the incorporated area of a city
or city and county and the unincorporated area of a county. The
department may withhold payment to any city, county, or city and
county that has prohibited the siting of a supermarket site, caused a
supermarket site to close its business, or adopted a land use policy
that restricts or prohibits the siting of a supermarket site within
its jurisdiction. 
   (6) 
    (5)     (A)  One million five hundred
thousand dollars ($1,500,000) may be expended annually in the form of
grants for beverage container recycling and litter reduction
programs. 
   (B) Notwithstanding subdivision (f), the department shall not
expend funds pursuant to this paragraph for the 2010 and 2011
calendar years.  
   (7) 
    (6)  (A) The department shall expend the amount
necessary to pay the processing payment established pursuant to
Section 14575. The department shall establish separate processing fee
accounts in the fund for each beverage container material type for
which a processing payment and processing fee are calculated pursuant
to Section 14575, or for which a processing payment is calculated
pursuant to Section 14575 and a voluntary artificial scrap value is
calculated pursuant to Section 14575.1, into which account shall be
deposited both of the following:
   (i) All amounts paid as processing fees for each beverage
container material type pursuant to Section 14575.
   (ii) Funds equal to the difference between the amount in clause
(i) and the amount of the processing payments established in
subdivision (b) of Section 14575, and adjusted pursuant to paragraph
(2) of subdivision (c) of, and subdivision (f) of, Section 14575, to
reduce the processing fee to the level provided in subdivision
 (f)   (e)  of Section 14575, or to reflect
the agreement by a willing purchaser to pay a voluntary artificial
scrap value pursuant to Section 14575.1.
   (B) Notwithstanding Section 13340 of the Government Code, the
moneys in each processing fee account are hereby continuously
appropriated to the department for expenditure without regard to
fiscal years, for purposes of making processing payments pursuant to
Section 14575. 
   (C) Notwithstanding the other provisions of this section and
Section 14575, for the 2010 and 2011 calendar years, the total amount
that the department may expend to reduce the amount of processing
fees for each container type shall not exceed the total amount
expended to reduce processing fees in the 2008 calendar year. 

   (8) 
    (7)    (A)  Up to five million dollars
($5,000,000) may be annually expended by the department for the
purposes of undertaking a statewide public education and information
campaign aimed at promoting increased recycling of beverage
containers. 
   (9) Until January 1, 2008, the department may expend up to five
million dollars ($5,000,000) for the purposes of undertaking a
statewide public education and information campaign aimed at
promoting increased recycling of beverage containers that meets both
of the following requirements:  
   (A) The public education and information campaign is multimedia
and includes print, radio, and television.  
   (B) The public education and information campaign is multilingual.
 
   (B) Notwithstanding subdivision (f), the department shall not
expend funds pursuant to this paragraph for the 2010 and 2011
calendar years.  
   (10) 
    (8)    Up to  fifteen million dollars
($15,000,000)   ten million dollars ($10,000,000) 
may be expended annually by the department for quality incentive
payments for empty  glass  beverage containers pursuant to
Section 14549.1. 
   (11) 
    (9)  Up to twenty million dollars ($20,000,000) may be
expended annually by the department, until January 1, 2012, to issue
grants for recycling market development and expansion-related
activities aimed at increasing the recycling of beverage containers
 , including,   . Notwithstanding subdivision
(f), the department shall not expend any funds pursuant to this
paragraph for the 2010 and 2011 calendar years. The activities that
may be funded include,  but  are  not limited to, the
following:
   (A) Research and development of collecting, sorting, processing,
cleaning, or otherwise upgrading the market value of recycled
beverage containers.
   (B) Identification, development, and expansion of markets for
recycled beverage containers.
   (C) Research and development for products manufactured using
recycled beverage containers.
   (D) Research and development to provide high-quality materials
that are substantially free of contamination.
   (E) Payments to California manufacturers who recycle beverage
containers that are marked by resin type identification code "3," "4,"
"5," "6," or "7," pursuant to Section 18015. 
   (12) Up to ten million dollars ($10,000,000) may be transferred on
a one-time basis by the department to the Recycling Infrastructure
Loan Guarantee Account, for expenditure pursuant to Section 14582.
 
   (13) Up to ten million dollars ($10,000,000) may be expended
annually by the department for the payment of recycling incentive
payments pursuant to Section 14549.7 until payments for eligible
beverage containers redeemed or collected for recycling on or before
December 31, 2009, have been paid.  
   (14) 
    (10)  Up to  five million dollars ($5,000,000)
  ten million dollars ($10,000,000)  may be
expended annually by the department for market development payments
for empty plastic beverage containers pursuant to Section 14549.2,
until January 1, 2012. 
   (15) Up to five million dollars ($5,000,000) may be expended, by
the department, on a one-time basis beginning on January 1, 2007, in
coordination with the Department of Parks and Recreation for the
purposes of installing source separated beverage container recycling
receptacles at each of the state parks, starting with those parks
that have the highest day use.  
   (16) Up to five million dollars ($5,000,000) may be expended, from
January 1, 2007, to January 1, 2008, to provide grants to local
governments or nonprofit agencies to place multifamily housing source
separated beverage container recycling receptacles in low-income
communities.  
   (17) (A) Up to fifteen million dollars ($15,000,000) may be
expended from January 1, 2008, to January 1, 2009, to provide grants
to place source separated beverage container recycling receptacles in
multifamily housing.  
   (B) Notwithstanding subdivision (b) of Section 14580, the amount
of one hundred ninety-eight thousand dollars ($198,000) may be
expended by the department from the fund, on a one-time basis, for
the administrative costs of implementing the grant program
established by subparagraph (A).  
   (18) 
    (11)  (A) Up to twenty million dollars ($20,000,000) may
be expended from July 1, 2009, to January 1, 2012, inclusive, for
either of the following:
   (i) Grants for beverage container recycling and litter reduction
programs that emphasize the greatest and most effective collection of
beverage containers per dollar spent to ensure the program's
performance and accountability.
   (ii) Focused, regional community beverage container recycling and
litter reduction programs that enable the department to more
effectively organize the amount and type of resources needed for
regional and statewide efforts to increase recycling.
   (B) The department shall require, as a condition of receiving
grant funds pursuant to subparagraph (A), each grant recipient to
submit a final report including, but not limited to, the grant
recipient's reported volumes of beverage containers recycled, where
applicable.
   (C) On or before July 1, 2014, the department shall publish an
evaluation of all grants made pursuant to subparagraph (A). At a
minimum, the evaluation shall summarize each final report submitted
by each grantee pursuant to subparagraph (B) and assess whether the
grantee adequately met the scope and objectives outlined in the grant
agreement. 
   (D) Notwithstanding subdivision (f), the department shall not
expend funds pursuant to this paragraph for the 2010 and 2011
calendar years. 
   (b) The fifteen million dollars ($15,000,000) that is set aside
pursuant to paragraph (3) of subdivision (a) is a base amount that
the department shall adjust annually to reflect any increases or
decreases in the cost of living, as measured by the Department of
Labor, or a successor agency, of the federal government.
   (c) (1) The department shall review all funds on a quarterly basis
 and provide a status report on its Internet Web site  to
ensure that there are adequate funds to make the payments specified
in this section and the processing fee reductions required pursuant
to Section 14575.
   (2) If the department determines, pursuant to a review made
pursuant to paragraph (1), that there may be inadequate funds to pay
the payments required by this section and the processing fee
reductions required pursuant to Section 14575, the department shall
immediately notify the appropriate policy and fiscal committees of
the Legislature regarding the inadequacy.
   (3) On or before 180 days  ,   but not less than 90
days,  after the notice is sent pursuant to paragraph (2), the
department                                            may reduce or
eliminate expenditures, or both, from the funds as necessary,
according to the procedure set forth in subdivision (d).
   (d) If the department determines that there are insufficient funds
to make the payments specified pursuant to this section and Section
14575, the department shall reduce all payments proportionally.
   (e) Prior to making an expenditure pursuant to paragraph (7) of
subdivision (a), the department shall convene an advisory committee
consisting of representatives of the beverage industry, beverage
container manufacturers, environmental organizations, the recycling
industry, nonprofit organizations, and retailers to advise the
department on the most cost-effective and efficient method of the
expenditure of the funds for that education and information campaign.

   (f) After setting aside money for the expenditures required
pursuant to subdivisions (a) and (b) and Section 14580, the
department may, on and after January 1, 2007, but not after July 1,
2007, expend remaining moneys in the fund to pay a refund value in an
amount greater than the refund value established pursuant to
subdivision (b) of Section 14560.  
   (f) Subject to the availability of funds, the department shall
retroactively pay in full any payments provided in this section that
have been proportionally reduced during the period of January 1,
2010, through June 30, 2010. 
   SEC. 6.    Section 13476 of the   Water Code
  is amended to read: 
   13476.  Unless the context otherwise requires, the following
definitions govern the construction of this chapter:
   (a) "Administration fund" means the State Water Pollution Control
Revolving Fund Administration Fund.
   (b) "Board" means the State Water Resources Control Board.
   (c) "Federal Clean Water Act" or "federal act" means the Clean
Water Act (33 U.S.C. Sec. 1251 et seq.) and acts amendatory thereof
or supplemental thereto.
   (d)  (1)    "Financial assistance" means
assistance authorized under Section 13480. Financial assistance
includes loans, refinancing, installment sales agreements, purchase
of debt, and loan guarantees for municipal revolving funds, but
excludes grants.  Financial 
    (2)     Notwithstanding paragraph (1),
financial  assistance may include grants  for projects
authorized pursuant to Section 13480 to the extent that grants for
those projects are funded by the federal American Recovery and
Reinvestment Act of 2009 (Public Law 111-5)   or other
assistance directed by a federal capitalization grant deposited in
the fund to the extent authorized and funded by that grant  .
   (e) "Fund" means the State Water Pollution Control Revolving Fund.

   (f) "Grant fund" means the State Water Pollution Control Revolving
Fund Small Community Grant Fund.
   (g) "Matching funds" means money that equals that percentage of
federal contributions required by the federal act to be matched with
state funds.
   (h) "Municipality" has the same meaning and construction as in the
federal act and also includes all state, interstate, and
intermunicipal agencies.
   (i) "Publicly owned" means owned by a municipality.
   (j) "Severely disadvantaged community" means a community with a
median household income of less than 60 percent of the statewide
median household income.
   SEC. 7.    Section 13480 of the   Water Code
  is amended to read: 
   13480.  (a) Moneys in the fund shall be used only for the
permissible purposes allowed by the federal act  or a federal
capitalization grant deposited in the fund to the extent authorized
and funded by that grant  , including providing financial
assistance for the following purposes:
   (1) The construction of publicly owned treatment works, as defined
by Section 212 of the federal act (33 U.S.C. Sec. 1292), by any
municipality.
   (2) Implementation of a management program pursuant to Section 319
of the federal act (33 U.S.C. Sec. 1329).
   (3) Development and implementation of a conservation and
management plan under Section 320 of the federal act (33 U.S.C. Sec.
1330).
   (4) Financial assistance, other than a loan, toward the nonfederal
share of costs of any grant-funded treatment works project, but only
if that assistance is necessary to permit the project to proceed.
   (5) Financial assistance provided under the federal American
Recovery and Reinvestment Act of 2009 (Public Law 111-5) for projects
authorized pursuant to this subdivision.
   (b) Consistent with expenditure for authorized purposes, moneys in
the fund may be used for the following purposes:
   (1) Loans that meet all of the following requirements:
   (A) Are made at or below market interest rates.
   (B) Require annual payments of principal and any interest, with
repayment commencing not later than one year after completion of the
project for which the loan is made and full amortization not later
than 20 years after project completion unless otherwise authorized
 under the federal American Recovery and Reinvestment Act of
2009 (Public Law 111-5) for projects authorized pursuant to
subdivision (a) and to the extent funded by that act  
by a federal capitalization grant deposited in the fund to the extent
authorized and funded by that grant  . Loan forgiveness is
permissible to the extent  permitted by the federal American
Recovery and Reinvestment Act of 2009 (Public Law 111-5) for projects
authorized pursuant to subdivision (a) and to the extent funded by
that act   authorized by a federal capitalization grant
deposited in the fund to the extent authorized and funded by that
grant  .
   (C) Require the loan recipient to establish an acceptable
dedicated source of revenue for repayment of a loan.
   (D) (i) Contain other terms and conditions required by the board
or the federal act or applicable rules, regulations, guidelines, and
policies. To the extent permitted by federal law, the combined
interest and loan service rate shall be set at a rate that does not
exceed 50 percent of the interest rate paid by the state on the most
recent sale of state general obligation bonds and the combined
interest and loan service rate shall be computed according to the
true interest cost method. If the combined interest and loan service
rate so determined is not a multiple of one-tenth of 1 percent, the
combined interest and loan service rate shall be set at the multiple
of one-tenth of 1 percent next above the combined interest and loan
service rate so determined. A loan from the fund used to finance
costs of facilities planning, or the preparation of plans,
specifications, or estimates for construction of publicly owned
treatment works shall comply with Section 603(e) of the federal act
(33 U.S.C. Sec. 1383(e)).
   (ii) Notwithstanding clause (i), if the loan applicant is a
municipality, an applicant for a loan for the implementation of a
management program pursuant to Section 319 of the federal Clean Water
Act (33 U.S.C. Sec. 1329), or an applicant for a loan for nonpoint
source or estuary enhancement pursuant to Section 320 of the federal
Clean Water Act (33 U.S.C. Sec. 1330), and the applicant provides
matching funds, the combined interest and loan service rate on the
loan shall be 0 percent. A loan recipient that returns to the fund an
amount of money equal to 20 percent of the remaining unpaid federal
balance of an existing loan shall have the remaining unpaid loan
balance refinanced at a combined interest and loan service rate of 0
percent over the time remaining in the original loan contract.
   (2) To buy or refinance the debt obligations of municipalities
within the state at or below market rates if those debt obligations
were incurred after March 7, 1985.
   (3) To guarantee, or purchase insurance for, local obligations
where that action would improve credit market access or reduce
interest rates.
   (4) As a source of revenue or security for the payment of
principal and interest on revenue or general obligation bonds issued
by the state, if the proceeds of the sale of those bonds will be
deposited in the fund.
   (5) To establish loan guarantees for similar revolving funds
established by municipalities.
   (6) To earn interest.
   (7) For payment of the reasonable costs of administering the fund
and conducting activities under Title VI (commencing with Section
601) of the federal act (33 U.S.C. Sec. 1381 et seq.). Those costs
shall not exceed 4 percent of all federal contributions to the fund,
except that if permitted by federal and state law, interest
repayments into the fund and other moneys in the fund may be used to
defray additional administrative and activity costs to the extent
permitted by the federal government and approved by the Legislature
in the Budget Act.
   (8) For financial assistance toward the nonfederal share of the
costs of grant-funded treatment works projects to the extent
permitted by the federal act.
   (9) Grants  , principal forgiveness, negative interest rates,
 and any other type of, or variation on the above types of,
assistance authorized by  the federal American Recovery and
Reinvestment Act of 2009 (Public Law 111-5) for projects authorized
pursuant to subdivision (a) and to the extent funded by that act
  a federal capitalization grant deposited in the fund
to the extent authorized and funded by that grant  .
   SEC. 8.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution. 
   SEC. 9.    This act addresses the fiscal emergency
declared by the Governor by proclamation on January 8, 2010, pursuant
to subdivision (f) of Section 10 of Article IV of the California
Constitution. 
   SEC. 10.    This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
 
   In order to protect the recycling of beverage containers in the
state and to authorize, as soon as possible, the expenditure of funds
under the State Water Pollution Control Revolving Fund Program in
accordance with federal laws, it is necessary that this act take
effect immediately.  
  SECTION 1.    It is the intent of the Legislature
to enact statutory changes relating to the Budget Act of 2009.
 
  SEC. 2.    This act addresses the fiscal emergency
declared by the Governor by proclamation on January 8, 2010,
pursuant to subdivision (f) of Section 10 of Article IV of the
California Constitution.