Report Title:

Solid Waste Management; Beverage Container Bill

Description:

Defines deposit beverage container. Imposes deposit beverage container requirements. Requires beverage distributors to register with the State. Establishes the deposit beverage container deposit special fund. Provides for the redemption of empty beverage containers. Provides requirements for recycling facilities and redemption centers.

HOUSE OF REPRESENTATIVES

H.B. NO.

1483

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO SOLID WASTE MANAGEMENT.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Act 176, sections 1, 2, and 17, Session Laws of Hawaii 2002, are repealed.

SECTION 2. The legislature finds that recycling is an important element of an integrated solid waste management system, which can protect and preserve environmental resources and reduce economic costs to residents and businesses within the State. The legislature finds a need to expand participation in recycling programs and to minimize costs to those participating and to government. The legislature also finds that Act 176, Session Laws of Hawaii 2002, was an attempt, albeit incomplete, to address these issues. The purpose of this Act is to achieve a better balance between stakeholders to increase participation and recycling rates for specified deposit beverage containers, provide a connection between manufacturing decisions and recycling program management, and reduce litter.

SECTION 3. Chapter 342G, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART . DEPOSIT BEVERAGE CONTAINER PROGRAM

§342G-A Definitions. As used in this part, unless the context requires otherwise:

"Auditor" means the office of the auditor.

"Consumer" means a person who buys a beverage in a deposit beverage container for use or consumption and pays the deposit.

"Dealer" means a person who engages in the sale of beverages in deposit beverage containers to a consumer for off-premises consumption in the State.

"Department" means the department of health.

"Deposit beverage" means beer, ale, or other drink produced by fermenting malt, mixed spirits, mixed wine, tea and coffee drinks regardless of dairy-derived product content, soda, or noncarbonated water, and all nonalcoholic drinks in liquid form and intended for internal human consumption that is contained in a deposit beverage container.

The term "deposit beverage" excludes the following:

(1) A liquid which is:

(A) A syrup;

(B) In a concentrated form: or

(C) Typically added as a minor flavoring ingredient in food or drink, such as extracts, cooking additives, sauces, or condiments;

(2) A liquid which is a drug, medical food or infant formula as defined by the Federal Food Drug and Cosmetic Act (21 U.S.C Sec. 301 et seq.);

(3) A liquid which is designed and consumed only as a dietary supplement and not as a beverage as defined in the Dietary Supplement Health and Education Act of 1994 (P.L. 103-417);

(4) Products frozen at the time of sale to the consumer, or, in the case of institutional users such as hospitals and nursing homes, at the time of sale to the users;

(5) Products designed to be consumed in a frozen state;

(6) Instant drink powders;

(7) Seafood, meat, or vegetable broths, or soups, but not juices; and

(8) Milk and all other dairy-derived products, except tea and coffee drinks with trace amounts of these products.

"Deposit beverage container" means the individual, separate, sealed glass, polyethylene terephthalte, high density polyethylene, or metal container less than or equal to sixty-four fluid ounces, used for containing, at the time of sale to the consumer, a deposit beverage intended for use or consumption in this State.

"Deposit beverage distributor" means a person who is a manufacturer of beverages in deposit beverage containers in this State, or who imports and engages in the sale of filled deposit beverage containers to a dealer or consumer. The term includes federal agencies and military distributors, but does not include airlines and shipping companies that merely transport deposit beverage containers.

"Import" means to buy, bring, or accept delivery of deposit beverage containers from an address, supplier, or any entity outside of the State.

"Importer" means any person who buys, brings, or accepts delivery of deposit beverage containers from outside the State for sale or use within the State.

"On-premises consumption" means to consume deposit beverages by a consumer immediately and within the area under control of the establishment, including bars, restaurants, passenger ships, and airplanes.

"Person" means individual, partnership, firm, association, public or private corporation, federal agency, the State or any of its political subdivisions, trust, estate, or any other legal entity.

"Recycling facility" means all contiguous land and structures and other appurtenances, and improvements on the land used for the collection, separation, recovery, and sale of reuse of secondary resources that would otherwise be disposed of as municipal solid waste, and is an integral part of a manufacturing process aimed at producing a marketable product made of postconsumer material.

"Redeemer" means a person, other than a dealer or distributor, who demands the refund value in exchange for the empty deposit beverage container.

"Redemption center" means an operation which accepts from consumers and provides the refund value for empty deposit beverage containers intended to be recycled

and ensures that the empty deposit beverage containers are properly recycled.

"Refillable beverage container" means any deposit beverage container which ordinarily would be returned to the manufacturer to be refilled and resold.

"Reverse vending machine" means a mechanical device, which accepts one or more types of empty deposit beverage containers and issues a redeemable credit slip with a value not less than the container's refund value. The refund value payments shall be aggregated and then paid if more than one container is redeemed in a single transaction.

§342G-B Deposit beverage distributors; registration, recordkeeping requirements. (a) By September 1, 2003, all deposit beverage distributors operating within the State shall register with the department, using forms prescribed by the department, and shall notify the department of any change in address or other information previously submitted. After September 1, 2003, any person who desires to conduct business in the State as a deposit beverage distributor shall register with the department no later than one month prior to the commencement of the business.

(b) All deposit beverage distributors shall maintain records reflecting the manufacture of their beverages in deposit beverage containers as well as the importation and exportation of deposit beverage containers. The records shall be made available, upon request, for inspection by the department; provided that any proprietary information obtained by the department shall be kept confidential and shall not be disclosed to any other person, except:

(1) As may be reasonably required in an administrative or judicial proceeding to enforce any provision of this chapter or any rule adopted pursuant to this chapter; or

(2) Under an order issued by a court or administrative agency hearings officer.

§342G-C Deposit into deposit beverage container deposit special fund; use of funds. (a) There is established in the state treasury the deposit beverage container deposit special fund, into which shall be deposited:

(1) The balance of the deposit beverage container deposit special fund established by Act 176, Session Laws of Hawaii 2002;

(2) All revenues generated from the deposit beverage container deposit as described under sections 342G-I and 342G-D; and

(3) All accrued interest from this fund.

(b) Moneys in the fund shall be used to reimburse refund values and pay handling fees to redemption centers. The department may also use the money to:

(1) Fund administrative, audit, and compliance activities associated with collection and payment of the deposits and handling fees of the deposit beverage container fee and deposit program;

(2) Conduct recycling education and demonstration projects;

(3) Promote recyclable market development activities; and

(4) Support the handling and transportation of the deposit beverage containers to end-markets.

§342G-D Deposit beverage container inventory report and payment. (a) Beginning October 1, 2002, deposits as described in section 342G-I shall be made monthly based on inventory reports of the deposit beverage distributors. All deposit beverage distributors shall submit to the department documentation in sufficient detail that identifies:

(1) The number of beverages in deposit beverage containers, by container size and type, manufactured in or imported to the State; and

(2) The number of these deposit beverage containers, by container size and type, exported and intended for consumption out of the State during the reporting period.

(b) The amount due from deposit beverage distributors shall be the net number of deposit beverage containers imported or manufactured into the State (the total number of containers imported or manufactured less the total number of containers exported for consumption outside the State) multiplied by the refund value of 5 cents. Payment shall be made by check or money order payable to the "Department of Health, State of Hawaii". All inventory reports and payments shall be made no later than the fifteenth day of the month following the end of the payment period of the previous month.

§342G-E Contract for administrative services. The department may contract the services of a third party to administer the deposit beverage container program under this part.

§342G-F Management and financial audit. The auditor shall conduct a management and financial audit of the program for fiscal years 2004-2005 and 2005-2006. The auditor shall submit the audit report, including the amount of unredeemed refund value and recommendations, to the legislature and the department no later than twenty days prior to the convening of next regular session. The costs incurred by the auditor for the audit shall be reimbursed by the deposit beverage container program special fund. The auditor may contract the audit services of a third party to conduct the audit.

§342G-G Reserved.

§342G-H Rules; commencement. The department may adopt rules pursuant to chapter 91 as may be necessary for the purposes of this part. Full implementation of the deposit beverage container deposit program shall commence no later than January 1, 2005.

§342G-I Payment and application of deposits. (a) By January 1, 2005, every deposit beverage container sold in this State shall have a refund value of 5 cents. Each container shall have the refund value clearly indicated on it as provided in section 342G-K.

(b) The refund value is the amount of the deposit required. Once a refund value has been applied to a deposit beverage container, the deposit on that container may not be changed and shall be paid to the State.

(c) The deposit on each filled deposit beverage container shall be paid by the deposit beverage distributor, who manufactures or imports beverages in deposit beverage containers. Payment and reporting of the deposits shall be in accordance with section 342G-D.

§342G-J Sales of beverages in deposit beverage containers. (a) Beginning January 1, 2005, every deposit beverage distributor who pays a deposit shall charge the dealer or consumer a deposit equal to the refund value for each deposit beverage container sold in Hawaii. The deposit charge may appear as a separate line item on the invoice.

(b) Each dealer shall charge the consumer the deposit beverage container deposit at the point of sale of the beverage excluding sales for on-premises consumption. The deposit charge may appear as a separate line item on the invoice.

§342G-K Deposit beverage container requirements. (a) Except as provided in subsection (b), every deposit beverage container sold in this State shall clearly indicate the refund value of the container and the word "Hawaii" or the letters "HI". Other indications may be required or allowed as specified in rules.

(b) Subsection (a) does not apply to any type of refillable glass beverage container which has a brand name permanently marked on it and which has the equivalent of a refund value of at least 5 cents which is paid upon receipt of such container by a dealer or distributor.

§342G-L Redemption of empty deposit beverage containers. (a) Except as provided in subsection (b), a dealer or any other entity may operate a redemption center. If a dealer chooses to operate a redemption center, the center shall:

(1) Accept all types of empty beverage containers with a Hawaii refund value;

(2) Pay to the redeemer the full refund value for all deposit beverage containers which bear a valid Hawaii refund value; and

(3) Ensure each deposit beverage container collected is recycled, and forward documentation necessary to support claims for payment as stated in section 342G-S, or rules adopted under this part.

(b) All dealers, regardless of the square footage of the dealer's place of business, shall post a clear and conspicuous sign at each public entrance to the dealer's place of business, which specifies the name, address, and hours of operation of the closest redemption center locations.

(c) If there is no redemption center within a two-mile radius of a dealer, then the respective county and the State shall determine the need for a redemption center in that area. If a redemption center is deemed necessary, then the State, with assistance from the county, shall establish the redemption center with funding from the deposit beverage container deposit special fund. To the greatest extent possible, if the State determines a need for a redemption center in a geographic area, the State shall establish the redemption center at a public school that already provides recycling receptacles by using a reverse vending machine.

(d) Businesses that sell deposit beverages for on-premises consumption, such as hotels, bars, and restaurants, shall collect used deposit beverage containers from the consumer; and use a certified redemption center for the collection of containers, or become a certified redemption center.

§342G-M Redemption centers. (a) Prior to operation, redemption centers shall be certified by the department.

(b) Applications for certification as a redemption center shall be filed with the department of health on forms prescribed by the department.

(c) The State, at any time, may review the certification of a redemption center. After written notice to the person responsible for the establishment and operation of the redemption center and to the dealers served by the redemption center, the State, after it has afforded the redemption center operator a hearing in accordance with chapter 91, may withdraw the certification of the center if it finds that there has not been compliance with applicable laws, rules, permit conditions, or certification requirements.

(d) Redemption centers shall:

(1) Accept all types of empty deposit beverage containers for which a deposit has been paid;

(2) Verify that all containers to be redeemed bear a valid Hawaii refund value;

(3) Pay to the redeemer the full refund value for all beverage containers, except as provided in section 342G-O;

(4) Crush or destroy all deposit beverage containers that are accepted at the time of redemption;

(5) Ensure each container collected is recycled through a contractual agreement with an out-of-state recycler or an in-state recycling facility permitted by the department; provided that this paragraph shall not apply if the redemption center is operated by a recycler permitted by the department; and

(6) Forward the documentation necessary to support claims for payment as stated in section 342G-Q.

(e) Redemption centers' redemption areas shall be maintained in full compliance with applicable laws and with the orders and rules of the department, including permitting requirements, if deemed necessary, under chapter 342H.

§342G-N Reverse vending machine requirements. Reverse vending machines may be used by redemption centers to satisfy the requirements of section 342G-L; provided that the reverse vending machine shall accept any type of empty deposit beverage container and pay out appropriate refunds via a redeemable voucher for those containers that bear a valid Hawaii refund value. If the reverse vending machine is unable to read the Hawaii refund value, then the department shall specify a delayed date in which the reverse vending machines may be used. The reverse vending machine shall be routinely serviced to ensure proper operation and continuous acceptance of containers and payment of refunds. All deposit beverage containers accepted by a reverse vending machine shall either be crushed or destroyed at the point of redemption.

§342G-O Refusal of refund value payment for a deposit beverage container. Redemption centers shall refuse to pay the refund value on any broken, corroded, dismembered, flattened deposit beverage container, or any deposit beverage container which:

(1) Contains a free flowing liquid;

(2) Does not properly indicate a refund value; or

(3) Contains a significant amount of foreign material.

A redemption center may collect deposit beverage containers which are not eligible for payment of the refund value and may pay a rate based on weight.

§342G-P Handling fees and refund values for certified redemption centers. (a) The State shall pay to each certified redemption center not less than 0.5 cents for each deposit beverage container redeemed by a consumer which is transported out-of-state or received by an approved in-state company for an approved end use for recycling or received by a department permitted recycling facility.

(b) Not less than thirty days before paying the amounts required by this section, the department shall publish a notice statewide in accordance with applicable state law of the recovery rate for the calendar quarter for which the amounts required by this section will be paid. Payments shall be made not less than six months after the completion of the calendar quarter to which the payment applies.

(c) The amounts shall be paid in addition to the refund value of each such empty beverage container. The department may choose to pay the amounts required under this section and refund value on the basis of the total weight of the containers received by material type and the average weight of each container type.

(d) Such amounts and refund value may only be paid once for each container redeemed by a consumer and claimed by a redemption center in accordance with section 342G-R.

§342G-Q Reserved.

§342G-R Redemption center reporting. The State shall pay certified redemption centers amounts and refund values as described in 342G-P, based on collection reports submitted by the redemption centers. All redemption centers shall submit to the department, information on forms prescribed by the department. Information shall include at a minimum:

(1) The amount and type of containers accepted and rejected;

(2) The amount of refunds paid out;

(3) The amount and weight of each type of containers transported out-of-state, or to a permitted recycling facility;

(4) Copies of out-of-state transport and weight receipts, or acceptance receipts from permitted recycling facilities. If the redemption center and the recycling facility are the same entity, copies of out-of-state transport and weight receipts, or documentation of end use accepted by the department, shall also be included.

The requests for payment shall be no more frequent than two times per month. Beginning January 1, 2005, each center shall report the previous quarter's information no later than thirty days after the end of that quarter so that the handling rate can be calculated. Failure to timely submit the report shall postpone payment for those containers until they are timely submitted for a subsequent quarter.

§342G-S Recycling facility reporting. Recycling facilities, in addition to any requirements under chapter 342H, shall prepare or maintain the documents involving empty beverage containers, as required by the department.

§342G-T Audit authority. The records of the deposit beverage distributor, dealer, redemption center, and recycling facility shall be made available, upon request, for inspection by the department, a duly authorized agent of the department, or the auditor. Any proprietary information obtained by them shall be kept confidential and shall not be disclosed to any other person, except:

(1) As may be reasonably required in an administrative or judicial proceeding to enforce any provision of this chapter or any rule adopted pursuant to this chapter; or

(2) Under an order issued by a court or administrative agency hearings officer."

SECTION 4. Act 176, Session Laws of Hawaii 2002, is amended by amending section 16 to read as follows:

"SECTION 16. The department shall provide quarterly reports on the deposit beverage container program to the legislature and the governor for the period beginning October 1, 2002 and ending December 31, 2004. The reports shall contain but not be limited to:

(1) Performance indicators;

(2) Measures of effectiveness;

(3) Organization charts; and

(4) Position descriptions of every type of position created and actual salaries paid to each employee.

The reports shall include recommended legislation for statutory changes.

If the administration of the program is contracted to a third party pursuant to section [342G-F] 342G-E, a copy of the contract shall be appended to the next applicable report, and the contractor shall abide by these reporting requirements as well. The contractor's pay scales shall be comparable to equivalent positions in civil service."

SECTION 5. All positions established for the program established by section 2 of this Act shall be temporary positions. No permanent position shall be established for the program and no temporary position shall be converted to a permanent position until explicitly authorized by the legislature.

SECTION 6. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on July 1, 2003.

 

INTRODUCED BY:

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