2011 Tennessee Beverage Container Recycling Refunds Act HB0289, SB0337 filed

[doeriver]

HB0289 by McDonald SB0337 by Summerville

Recycling - As introduced, enacts the "Tennessee Beverage Container Recycling Refunds Act," whereby certain procedures, processes, and fees are described for the recycling of waste; creates a deposit system for the recycling of certain beverage containers. - Amends TCA Title 68, Chapter 211 and Chapter 616 of the Public Acts of 2010.

HB0289: Intro., P1C. 2/7/2011
SB0337: Intro., P1C. 2/7/2011
http://wapp.capitol.tn.gov/apps/BillInfo/default.aspx?BillNumber=HB0289&GA=107

Bill Summary *HB 0289 by *McDonald. (SB 0337 by *Summerville, McNally, Marrero.)
http://wapp.capitol.tn.gov/apps/billinfo/BillSummaryArchive.aspx?BillNumber=HB0289&ga=107

Fiscal Summary
Not Available

Bill Summary
This bill establishes a deposit and recycling program for beverage containers made of glass, plastic, or aluminum/bimetal holding beer, soft drinks, water, tea, coffee and other specified beverages, but not medicines, flavoring substances, milk, liquids designed to be consumed only as a dietary supplement, frozen products, wine and spirits, and soups. The division of solid waste management within the department of environment and conservation would administer the program, with accounting functions performed by the department of revenue.

This bill requires, by September 1, 2011, any deposit beverage distributor manufacturing in the state to register with the department of revenue. After September 1, 2011, any person seeking to operate as a deposit beverage distributor must register no later than 30 days prior to the commencement of business. This bill also requires any redemption center or processor in this state to obtain certification by the department of environment and conservation.

REQUIRED FEES AND DEPOSITS

This bill requires every deposit beverage distributor to pay, beginning on October 1, 2011, a container recovery fee for each deposit beverage container manufactured in or imported into the state to the department of revenue. The amount of the fee would be as follows:
(1) $0.0025 per container from October 1, 2011, until June 30, 2012;
(2) $0.00035 per container from July 1, 2012, until June 30, 2015; and
(3) $0.000125 per container beginning on July 1, 2015.

Beginning March 1, 2013, each distributor must pay the refund value (deposit) of five cents per deposit beverage container to the department of revenue. Beginning April 1, 2013, deposit beverage distributors must charge a deposit equal to the five-cent refund value to the dealer or consumer for each deposit beverage container sold in Tennessee for beverages to be consumed off-premises. This provision does not apply to beverages to be consumed on-premises.

No local government may impose or collect any assessment or fee on deposit beverage containers for the same or similar purpose of this bill. The payments of the fee would be accompanied with an inventory report of the number of containers manufactured in or imported into the state during the reporting period.

REDEMPTION OF BEVERAGE CONTAINERS

This bill provides for redemption centers that would accept empty deposit beverage containers from consumers, provide refund values for the containers, and ensure that the properly sorted containers are received by a certified processor, described below.

This bill establishes certain requirements for redemption centers, such as maintain a log of all consumer transactions, sort and consolidate the redeemed containers, provide all records and documentation of redemption activity to the department upon request, and provide a shipping report to the certified processor. This bill authorizes any certified redemption center to apply for and receive authorization from the department to cancel (crush, shred, or otherwise render a container unfit for redemption) redeemed deposit beverage containers.

If an area is determined to be underserved, then the department, with input from the affected county, would use its best efforts to see that a certified redemption center is established in that area.

This bill authorizes a reverse vending machine to act as a redemption center. This bill establishes certain requirements regarding the machine, such as being monitored during operating hours by an attendant and being routinely serviced.

Beginning April 1, 2013, the department of revenue must pay to a certified redemption center an overhead allowance for each transaction conducted. The amount of the overhead allowance would be 20 percent of total refund values paid during the period covered by the transaction. The amount would remain at that level until changed by the commissioner in response to either of the following conditions:
(1) If monies in the deposit beverage container fund, described below under REVENUE AND ADMINISTRATION PROVISIONS, decrease to a level at which the fund can no longer sustain in the long term an overhead allowance of 20 percent of refund values, the percentage must be reduced by the commissioner, in consultation with the commissioner of revenue, and according to terms promulgated by the commissioner by rule; or
(2) If monies in the fund increase to a level at which the fund can sustain in the long term an overhead allowance greater than 20 percent of refund values, the percentage may be increased by the commissioner, in consultation with the commissioner of revenue, and according to terms promulgated by the commissioner by rule.

PROCESSING OF BEVERAGE CONTAINERS

This bill provides for the certification of processors that would cancel, process, and reuse, or sell for reuse deposit beverage containers that have been collected at certified redemption centers. This bill establishes certain requirements for certified processors.

A certified processor must pay certified redemption centers the sum of: the refund value of the redeemed container received from the center; the prevailing overhead and administrative allowances for the redeemed containers as specified in this bill; and payment for the container materials that reflects prevailing market scrap prices, incurred transportation or delivery costs, and other factors. Beginning April 1, 2013, a certified processor must submit to the department a processor's invoice for this amount, within 30 calendar days.

If, after making a good-faith effort, a certified processor is unable to locate a willing purchaser for processed beverage container material, the certified processor would submit to the department a disposal request form that describes the material and quantities, details efforts made to find a willing purchaser, and specifies the intended manner and location of disposal. The material may not be disposed of without a written authorization to do so by the department of environment and conservation. The certified processor may recover costs associated with handling and disposing of the rejected material, by presenting to the department of revenue a written request for reimbursement.

Beginning April 1, 2013, the department of revenue must pay to a certified processor an administrative allowance for each transaction to defray the certified processor's costs of complying with the administrative requirements of this program. The amount of the administrative allowance would be 2 percent of total refund values paid during the period covered by the transaction. If monies in the fund increase to a level at which the fund can sustain in the long term an administrative allowance greater than 2 percent of refund values, the percentage may be increased by the commissioner, in consultation with the commissioner of revenue, and according to terms promulgated by the commissioner by rule. If monies in the fund should subsequently decline to a level at which the fund can no longer sustain the increase, the percentage may be reduced by the commissioner, in consultation with the commissioner of revenue, but in no case may it be reduced below 2 percent.

REVENUE AND ADMINISTRATION PROVISIONS

This bill establishes the deposit beverage container fund, to be created by the department of revenue. All program fees, deposits, fines, and interest would be deposited into the fund. The fund would be used to:
(1) Pay all programs costs, refund values, overhead and administrative allowances, disposal costs, and other allocations;
(2) Reimburse the department of transportation for the loss of funding for the county litter grants program, including funding for litter education and eradication activities by county governments and Keep Tennessee Beautiful. The payments would be made annually to the department of transportation, beginning September 1, 2012. The amount of the payment would be equal to the sum of the products of the following calculations:
(A) $0.50 per taxable 31-gallon barrel or partial barrel of malt beverage sold during the payment period; and
(B) 0.4 percent of taxable gross receipts of soft drinks sold during the payment period; and
(3) Reimburse local government for any loss in additional revenue due to the repeal of certain tax increases that were established in 1981 for the funding of programs for the prevention and collection of litter by this bill, described below.

This bill reduces the following taxes, beginning June 30, 2011, as follows:
(1) From $4.29 to $3.79 per barrel of 31 liquid gallons of beer and alcoholic beverages stored, sold, distributed by gift or sale or manufactured in this state; and
(2) From 1.9 percent to 1.5 percent of the gross receipts of a person manufacturing, producing, or importing into this state and selling within this state any bottled soft drinks, derived from such business.

Moneys deposited into the fund may also be used to establish or support certified redemption centers, to support certified processors, and to provide grants to local government for solid waste management, recycling, curbside recycling, litter control, and other programs and activities related to this bill.

The comptroller would conduct a management and financial audit of the program for the fiscal years 2012-2013 and 2013-2014 and for each fiscal year ending in an even-numbered year thereafter. The report, the amount of unredeemed refund value, and the comptroller's recommendations would be submitted to the general assembly and the departments of revenue and environment and conservation by January 2 following the end of the preceding reporting period. The costs incurred for the audit would be reimbursed by the deposit beverage container fund.

The commissioner would convene an advisory committee to assist in developing any rules for this bill. The members of the committee would be appointed by the commissioner and would serve at the commissioner's pleasure.

VIOLATIONS OF PROVISIONS OF THIS BILL

Any person who violates any provision of this bill or any rule adopted pursuant to the bill would be assessed a civil penalty up to $10,000 for each separate offense. Each day of each violation would constitute a separate offense.

If the commissioner determines that any person has violated or is violating any provision of this bill, any rule, or any term or condition of a certification or permit, the commissioner could do one or more of the following:
(1) Issue a field citation assessing a civil penalty and ordering corrective action immediately or within a specified time;
(2) Issue an order assessing a civil penalty for any past or current violation, including a suspension, modification, or revocation of a certification or permit issued pursuant to this bill;
(3) Require compliance immediately or within a specified time; and
(4) Commence a civil action in chancery or circuit court in Davidson County for appropriate relief.

Any such order issued would become final, unless the person named in the order requests a hearing before the commissioner, in writing, and not later than 20 days after the notice of order is served. If the amount of any penalty is not paid to the department of environment and conservation within 30 calendar days after an order becomes final, then the commissioner may institute a civil action to collect the final penalty amount. In any such proceeding, the commissioner need only show that: notice was given; a hearing was held or the time granted for requesting a hearing expired without a request for a hearing; the civil penalty was imposed; and the penalty remains unpaid.

This bill makes it a Class A misdemeanor for any person, in a single transaction, to tender more than 24 empty beverage containers to a redemption center when the person knows or has reason to know the containers were not originally sold in this state as filled beverage containers. A violator would be subject to a fine of the greater of $100 for each container or $25,000 for each tender of containers. Each fine collected pursuant to this provision, minus court costs, would be deposited into the fund and expended for activities authorized by this bill. However, if the violation was detected and reported by a certified redemption center or processor, then the fine would be disposed of as follows: 50 percent of the fine would remain in the fund to be expended for authorized purposes and 50 percent would be awarded to the certified redemption center or processor reporting the violation.

REPORTS

The department of environment and conservation, in consultation with the department of revenue, would provide annual reports on the deposit beverage container program to the general assembly and the governor, except that the first report would be for the period of October 1, 2011, to June 30, 2013. The reports would contain but not be limited to performance indicators, revenues and expenditures, measures of effectiveness, and economic impacts.