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									 STATE OF CALIFORNIA                                                              CALIFORNIA INTEGRATED
 Revised September 2008                                                        WASTE MANAGEMENT BOARD

                         Recycling Market Development Revolving Loan Program
                                 General Loan Criteria - September 2008
                                      Effective September 16, 2008


Introduction
The Recycling Market Development Revolving Zone (RMDZ) Loan Program (Loan Program) provides low-
interest loans to private businesses and not-for-profit organizations to increase diversion of non-hazardous
solid waste from California landfills and to promote market demand for secondary and postconsumer
materials.

The purpose of this document is to provide information on the RMDZ Loan Program General Loan Criteria.
The information contained herein is not intended to be all inclusive of the criteria used to evaluate loan
applications.

Applications are evaluated on an individual basis based upon the purpose, goals, and requirements of the
Loan Program as set forth by law and regulation. Environmental Justice is addressed through the Zone
approval/renewal process and local permit process. For additional information regarding the RMDZ loan
program, please contact the California Integrated Waste Management Board’s (Board)'s loan program staff.

General Loan Criteria
The general criteria applies to all RMDZ loans, regardless of the type of project.

Where must the project be located?
The project, or if a mobile operation, the primary business location must be located within a Recycling Market
Development Zone.

What is the maximum loan amount?
The program can fund a maximum of 75% of costs directly attributed to an eligible project up to a maximum of
$2 million whichever is less.

Can a borrower or related entity obtain more than one RMDZ loan?
A borrower may apply for subsequent loans for business expansion that result in additional diversion using
the same or different type of feedstock, manufacturing process, or end product, but may not have more than
$3,000,000 total principal outstanding on all RMDZ loans to a borrower and related entities at any one time.

Who can apply?
Eligible applicants can include businesses and not-for-profit organizations.

Eligible Projects
Eligible projects must result in the diversion of solid waste from California landfills. See separate document
titled “Project Eligibility Criteria.”

What can the funds be used for?
Businesses and non-profit organizations can use the funds(a) for
       •       Machinery and equipment,
       •       Working capital,
       •       Real estate purchase (b) , (maximum of $1,000,000)
       •       Real estate improvements (b), and

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 STATE OF CALIFORNIA                                                             CALIFORNIA INTEGRATED
 Revised September 2008                                                       WASTE MANAGEMENT BOARD

        •       Refinancing of onerous debt that results in increased diversion, and
        •       Funds can also be used for financing loan-closing points.
                (a) RMDZ loan recipients are required to agree that when purchasing products with loan
                funds in the 11 SABRC categories, the borrower agrees to purchase recycled-content
                products when available and fitness and quality are equal to that of non-recycled products.

                (b) Loans made to finance the purchase of commercial real estate and/or to make
                necessary real-estate improvements will require the application of sustainable building
                practices. At least 25% of the loan funds approved for improvements to property would have
                to be applied toward those costs involving sustainable building products and services. This
                would apply only to the portion of the loan funds used for improvements. Examples include
                the use of recycled paints, carpets, cubicles, and rubberized asphalt. The installation of
                energy efficient lighting, heating and cooling systems, water conserving and shade producing
                landscape would be applicable. Borrowers are required to provide invoices showing the
                amount that 25% was purchased and the types of products and services purchased.

Can residential real estate (primary single family residence) be used as collateral?
It is Board policy not to take a primary single-family residence as collateral. An applicant may request the
Board to make an exception to this policy, and the Board will consider the request on a case-by-case basis,
subject to the standard staff and loan committee recommendation process.

What is the cost of loan closing points?
The cost of loan closing points shall be ½ percent, collected at the time loan funds are disbursed into escrow.
RMDZ loan proceeds may be used to pay the points.

What is the loan application fee?
The loan application fee is $300, due and payable upon the Board’s receipt of an RMDZ loan application.

What is the interest rate?
The interest rate is equal to the State’s Surplus Money Investment Fund (SMIF) rate, but no less than 4.00%.
The Board will announce the interest rates semiannually in February and August, after public announcement
by the State Controller’s Office. The rate will be fixed for the term of each loan.

Public Infrastructure and Capital Improvements
Should a local jurisdiction need financing, Board staff will refer them to other state programs and provide
some assistance in applying for those funds.




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    STATE OF CALIFORNIA                                                            CALIFORNIA INTEGRATED
    Revised September 2008                                                      WASTE MANAGEMENT BOARD

                          Recycling Market Development Revolving Loan Program
                                Project Eligibility Criteria - September 2008
                                        Effective September 16, 2008

Introduction
The California Integrated Waste Management Board (Board) is authorized by Public Resources Code (PRC)
Section 42000 (e) to “conduct individual market development activities” that strengthen demand by
manufacturers for the recyclable material collected by municipalities, private companies and others. The
Board may do this by lending directly to California manufacturers located within the boundaries of a Recycling
Market Development zone, that reduce manufacturing post-industrial waste, and/or reduce post-consumer
waste destined for landfills by production of recycled content raw materials or final products.

These eligibility criteria are not intended to be all inclusive. The Board retains the discretion to determine
project eligibility based on current policy and priorities. Each prospective loan applicant is encouraged to
contact Board loan staff to discuss their specific project.

Project Eligibility Criteria
In order to be eligible for consideration, a project must meet the following criteria and types of projects
described below:

     Statutes: The “highest priority” for loan funding, according to Public Resources Code (PRC) section
      42023.4(a)(3), shall be given to projects that demonstrate that they will increase demand for a recyclable
      material, which is normally disposed in California.

     Regulations: The California Code of Regulations (CCR) sections 17909 and 17933 further specify that
      priority shall be given to projects that satisfy “additional statewide recycling market development
      objectives” and priorities that are determined by the Board.

     Priority materials: The Board identified construction & demolition debris, plastics, organics, and paper as
      priority materials. The Board intends to focus its resources on diverting and developing sustainable
      markets for these priority materials.

     Project location: The project must be located within a recycling market development zone [PRC Section
      42023.1(f)].

     Project diversion: Each project must result in the diversion of non-hazardous solid waste from California
      landfills [14 CCR 17930].

     The project must involve reducing manufacturing waste or making new products out of recycled material
      [14 CCR 17932].

     Projects using post-industrial materials must meet the definition of secondary waste material (Public
      Resources Code, section 42002(f)) “means industrial byproducts which would otherwise go to disposal
      facilities and wastes generated after completion of a manufacturing process, but does not include
      internally generated scrap commonly returned to industrial or manufacturing processes, such as home
      scrap and mil broke.”




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 STATE OF CALIFORNIA                                                              CALIFORNIA INTEGRATED
 Revised September 2008                                                        WASTE MANAGEMENT BOARD

The following project categories and examples are provided to assist potential business borrowers. Board
staff determines feedstock eligibility and final project qualification is determined by the Board. The categories
include, but are not limited to, the projects specified below:

What types of projects are currently eligible?
       1.      Waste Prevention
       2.      Reuse
       3.      Recycling
                   a. Producing recycled raw feedstock material
                   b. Manufacturing recycled-content finished products
       4.      Conversion technology & biomass technology
                   a. Conversion technology
                   b. Biomass conversion

What types of projects are ineligible?
Ineligible projects include electronic waste, hazardous waste, metals, transformation, single use plastic bags
that do not meet the intent of AB 2449 (Levine, Chapter 845, Statute of 2006) and the definition of Secondary
Waste Material (Public Resources Code, section 42002(f)); and polystyrene food containers. In addition,
materials that are banned from landfills are also not eligible for a loan.

1.      What Are Waste Prevention Projects?
        Waste Prevention projects change the way products are made or packaged to prevent or reduce solid
        waste. This can be accomplished only by modifying equipment or processes, improving operations
        and maintenance, and changing materials in manufacturing. The project will result in less waste
        being generated during the manufacturing process.

        Examples of eligible projects:
         Modifying equipment or processes to make products using less raw material or packaging.
         Converting to optimizing equipment to reduce waste generation.

        Examples of ineligible projects:
         Buying recycled or reusable pallets, reusable containers or reusable filters that are not directly
           involved in the making of a product.
         Procurement of “environmentally-friendly” office products.
         Manufacturing or procurement of bio-degradable products.
         Reclamation of scrap metal.
         Production of single use plastic bags that do not meet the intent of AB 2449 (Levine, Chapter
           845, Statute of 2006) and the definition of Secondary Waste Material.
         Production of polystyrene food containers.

2.      What Are Reuse Projects?
        Reuse projects will prolong the useful life of a product, delaying final disposal or recycling. Reuse is
        the repair, reconditioning, washing, or treatment of a worn or used product that makes the product
        useable again for its originally intended purpose.

        Examples of eligible projects:
         Separating construction and demolition debris or other salvageable items by material type for
           sale.
         Resurfacing or re-sawing reclaimed lumber from old buildings for decking and paneling.

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 STATE OF CALIFORNIA                                                         CALIFORNIA INTEGRATED
 Revised September 2008                                                   WASTE MANAGEMENT BOARD

          Sorting and repairing used plastic garment hangers from department stores.

      Examples of ineligible projects:
       Making home or automobile repairs.
       Repairing consumer items or appliances.
       Laundry services.
       Collecting and/or distributing food.
       Selling used items in thrift shops.
       Dismantling automobiles or white goods.

3.    What Are Recycling Projects?
      Recycling manufacturers either produce a recycled content raw material/feedstock for use by other
      manufactures that further process the material, or produce a final product. Below are examples of
      projects for each of the type of recycling projects.

      a.      Producing a recycled raw material from non-hazardous solid waste.

              Examples if eligible projects:
               Agricultural and commercial plastic film cleaning.
               Producing recycled-content plastic pellets, flakes, or chips.
               Producing crumb rubber from recovered tires.
               Producing wood fuel for biomass projects.

              Examples of ineligible projects:
               Collecting and/or sorting of non-C & D recyclables.
               Crushing, grinding or baling recyclables for ease of transport.
               Using recyclables as alternative daily cover at landfills.

      b.      Producing a recycled-content finished product from non-hazardous solid waste and/or a
              recycled material.

              Examples of eligible projects:
               Manufacturing plastic pallets or lumber.
               Producing mulch or compost.
               Manufacturing colorful glass tableware, trophies and gift items from recycled glass.
               Making rubberized asphalt and molded rubber products from crumb rubber.
               Converting rolls of recycled paper into such products as boxes, kitchen towels, table
                 napkins, and facial tissue.

              Examples of ineligible projects:
               Printing operations.
               Land application or reclamation projects using mulch and/or compost.
               Production of single use plastic bags that do not meet the intent of AB 2449 (Levine,
                 Chapter 845, Statute of 2006) and the definition of Secondary Waste Material.
               Production of polystyrene food containers.


4.    What Are Conversion Technology & Biomass Projects?



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STATE OF CALIFORNIA                                                          CALIFORNIA INTEGRATED
Revised September 2008                                                    WASTE MANAGEMENT BOARD

     a.      “Conversion technologies” convert waste materials that cannot be composted or recycled,
             into high-value products such as energy, fuels, and citric acid. These technologies include:
                   Thermal conversion (e.g., gasification, catalytic cracking);
                   Chemical conversion (e.g., acid hydrolysis/fermentation); and
                   Biological conversion (e.g., enzyme hydrolysis/fermentation). Such non-combustion
                      processes use yard trimmings and wood waste, agricultural residue and low-value
                      paper as feedstock.

             Examples of eligible projects:
              Projects using gasification to convert agricultural and material recovery facility residuals
                into a synthetic or fuel gas that can be used to produce electricity.
              Projects using fermentation to convert plant-based materials containing cellulose, such
                as forest material, sawmill residue and agricultural residue into component sugars that
                can be used to produce ethanol or citric acid.
              Projects using anaerobic digestion to break down organic materials in the absence of
                oxygen to produce a gas for energy.
              Projects using hydrolysis to convert rice straw to ethanol.

             Examples of ineligible projects:
              The combustion of waste.
              Projects using easily recycled material as feedstock , such as polyethylene terephthalate
                (PETE) plastic beverage containers and high quality paper.

     b.      “Biomass Conversion" means the controlled combustion of (1) agricultural crop residues; (2)
             bark, lawn, yard, and garden clippings; (3) leaves, silviculture residue, tree and brush
             pruning; (4) wood, wood chips, and wood waste; or (5) non-recyclable pulp or non-recyclable
             paper materials, when separated from other solid waste and used for producing electricity or
             heat.

             Examples of eligible projects:
              Burning other materials as a supplemental fuel source.

             Examples of ineligible projects:
              Burning material other than biomass, such as hazardous waste or tires.
              Burning coal or natural gas.




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