Report Title:

Deposit beverage container program

Description:

Clarifies and increases the effectiveness of the Deposit Beverage Container Program by exempting containers exported for sale from the container fee after 10/1/04, determining the redemption rate on an annual basis, allowing the 5-cent deposit value to be charged starting 11/1/04, exempting beverage container deposits from income tax, and extending the implementation date for redemption centers to 7/1/05, among other provisions. (HB2968 HD2)

HOUSE OF REPRESENTATIVES

H.B. NO.

2968

TWENTY-SECOND LEGISLATURE, 2004

H.D. 2

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. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235- Deposit beverage container deposit exemption. This chapter shall not apply to amounts received as a deposit beverage container deposit collected under part VIII of chapter 342G."

SECTION 2. Section 342G-101, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""Redemption rate" means the percentage of deposit beverage containers redeemed over a reporting period. The percentage is calculated by dividing the number of deposit beverage containers redeemed by the number of deposit beverage containers sold and then multiplying that number by one hundred."

SECTION 3. Section 36-27, Hawaii Revised Statutes, is amended to read as follows:

"§36-27 Transfers from special funds for central service expenses. Except as provided in this section, and notwithstanding any other law to the contrary, from time to time, the director of finance, for the purpose of defraying the prorated estimate of central service expenses of government in relation to all special funds, except the:

(1) Special out-of-school time instructional program fund under section 302A-1310;

(2) School cafeteria special funds of the department of education;

(3) Special funds of the University of Hawaii;

(4) State educational facilities improvement special fund;

(5) Convention center enterprise special fund under section 201B-8;

(6) Special funds established by section 206E-6;

(7) Housing loan program revenue bond special fund;

(8) Housing project bond special fund;

(9) Aloha Tower fund created by section 206J-17;

(10) Funds of the employees' retirement system created by section 88-109;

(11) Unemployment compensation fund established under section 383-121;

(12) Hawaii hurricane relief fund established under chapter 431P;

(13) Hawaii health systems corporation special funds;

(14) Tourism special fund established under section 201B-11;

(15) Universal service fund established under chapter 269;

(16) Integrated tax information management systems special fund under section 231-3.2;

(17) Emergency and budget reserve fund under section 328L-3;

(18) Public schools special fees and charges fund under section 302A-1130(f);

(19) Sport fish special fund under section 187A-9.5;

(20) Neurotrauma special fund under section 321H–4;

(21) Deposit beverage container [deposit] special fund under section 342G-104;

(22) Glass advance disposal fee special [fund established by section 342G-82;] account established in the environmental management special fund pursuant to section 342G-84; and

(23) Center for nursing special fund under section 304D-5;

shall deduct five per cent of all receipts of all other special funds, which deduction shall be transferred to the general fund of the State and become general realizations of the State. All officers of the State and other persons having power to allocate or disburse any special funds shall cooperate with the director in effecting these transfers. To determine the proper revenue base upon which the central service assessment is to be calculated, the director shall adopt rules pursuant to chapter 91 for the purpose of suspending or limiting the application of the central service assessment of any fund. No later than twenty days prior to the convening of each regular session of the legislature, the director shall report all central service assessments made during the preceding fiscal year."

SECTION 4. Section 342G-82, Hawaii Revised Statutes, is amended by amending its title and subsection (a) to read as follows:

"§342G-82 [Advance] Glass advance disposal fee. (a) Every glass container importer shall pay to the department [an] a glass advance disposal fee. The fee shall be imposed only once on the same glass container and shall not be assessed on drinking glasses, cups, bowls, plates, ashtrays, and similar tempered glass containers. For the period beginning September 1, 1994, the fee shall be [one and one-half] 1.5 cents per glass container. Beginning October 1, 2004, the glass advance disposal fee shall only apply to glass containers that are not glass deposit beverage containers."

SECTION 5. Section 342G-84, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Revenues generated from the glass advance disposal fee shall be deposited into a special account in the environmental management fund. Moneys from the special account shall be used to fund county glass recovery programs established in accordance with the requirements under section 342G-86; provided that no moneys shall be made available to a county unless the county has first submitted its formally adopted integrated solid waste management plan to the department for review. In the event of any surplus in the special account, the department shall recommend a reduction in the fee as deemed necessary."

SECTION 6. Section 342G-85, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) Payment of the glass advance [glass] disposal fee shall be made quarterly based on inventory reports of the glass container importers, except for those importers subject to subsection (c) or (d). All glass container importers shall submit to the department documentation in sufficient detail that identifies the number of glass deposit beverage and glass non-deposit beverage containers manufactured or imported to the State and sold or distributed, by manufacturer or distributor, during the calendar year.

(b) Until September 30, 2004, the amount due from glass container importers less glass containers exported for the calendar year shall be the sum equal to the number of glass containers provided in subsection (a) multiplied by the glass advance disposal fee specified in section 342G-82. Beginning October 1, 2004, the amount due from glass container importers shall be the sum equal to the number of non-deposit beverage glass containers provided in subsection (a), less non-deposit beverage glass containers exported, and multiplied by the advance disposal fee. Payment shall be made by check or money order payable to the "Department of Health, State of Hawaii". All subsequent inventory reports and payments shall be made not later than the fifteenth day of the month following the end of the previous calendar quarter, except for those importers subject to subsection (d)."

SECTION 7. Section 342G-87, Hawaii Revised Statutes, is amended to read as follows:

"[[]§342G-87[]] Contract for administrative services. The department may contract the services of a third party to administer the glass advance disposal fee program under this part."

SECTION 8. Section 342G-102, Hawaii Revised Statutes, is amended to read as follows:

"[[]§342G-102[]] Deposit beverage container fee. (a) Beginning on October 1, 2002, every deposit beverage distributor shall pay to the department a deposit beverage container fee on each polyethylene [terephtalte,] terephthalate, high density polyethylene, or metal deposit beverage container manufactured in or imported into the State. The fee shall be imposed only once on the same beverage container. The fee shall be 0.5 cents per beverage container.

(b) Beginning on October 1, 2004, every deposit beverage distributor shall pay to the department a deposit beverage container fee on each deposit beverage container manufactured in or imported into the State. The deposit beverage container fee shall not apply to deposit beverage containers exported for sale outside of the State. The fee shall be imposed only once on the same beverage[.] container. The fee shall be 1 cent per beverage container.

(c) No county shall impose or collect any assessment or fee on deposit beverage containers for the same or similar purpose that is the subject of this chapter.

(d) Beginning January 1, 2005, [the deposit beverage container fees shall be based on a previous calendar quarter's recycling rates as established by rules. The rates shall be as follows, based on the number of containers sold and the number recovered during a previous quarter:] and every August 1 thereafter, the department shall notify distributors in writing of the amount of the deposit beverage container fee. The effective date of changes to the fee amount shall be September 1. The fee shall be based on the redemption rate calculated annually based on the redemption rate information submitted to the department for the previous period of July 1 through June 30. The fee amount shall be as follows:

(1) If the [recovery] redemption rate is seventy per cent or less: 1 cent per container; and

(2) If the [recovery] redemption rate is greater than seventy per cent: 1.5 [cent] cents per container."

SECTION 9. Section 342G-104, Hawaii Revised Statutes, is amended by amending its title and subsection (a) to read:

"[[]§342G-104[]] 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) All revenues generated from the deposit beverage container fee as described under [sections] section 342G-102 [and 342G-105];

(2) All revenues generated from the deposit beverage container deposit as described under sections [342G-105 and] 342G-110[;] and 342G-111; and

(3) All accrued interest from this fund."

SECTION 10. Section 342G-110, Hawaii Revised Statutes, is amended as follows:

1. By amending its title to read:

"[[]§342G-110[]] [Payment and application of deposits.] Deposit beverage container deposit; payment."

2. By amending subsection (c) to read:

"(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-105.] 342G-111. The deposits shall be deposited into the deposit beverage container [deposit] special fund as described in section 342G-104."

SECTION 11. Section 342G-111, Hawaii Revised Statutes, is amended to read as follows:

"[[]§342G-111[]] Sales of beverages in deposit beverage containers[.]; distributor report; fee and deposit payment. (a) [Beginning] By January 1, 2005, every deposit beverage distributor who pays a deposit to the department 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.

(c) Each deposit beverage distributor shall generate and submit to the department a monthly report on:

(1) The number of beverages in deposit beverage containers, by container size and type, manufactured in or imported into 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.

All information contained in the reports, including confidential commercial and financial information, shall be treated as confidential and protected to the extent allowed by state law.

(d) Payment of the deposit beverage container fee and deposits as described in section 342G-110 shall be made monthly based on reports of the deposit beverage distributors under subsection (c).

(e) Beginning January 1, 2005, a deposit beverage distributor who annually imports or manufactures one hundred thousand or fewer deposit beverage containers may submit reports and payments required under subsections (c) and (d) on a semi-annual basis; provided that the semi-annual report and payment period shall end on June 30 and December 30 of each year.

(f) The amount due from a deposit beverage distributor shall be the net number of deposit beverage containers sold multiplied by the sum of the prevailing deposit beverage container fee and the deposit value of 5 cents. Payment shall be made by check or money order payable to the "Department of Health, State of Hawaii". All reports and payments shall be made no later than the fifteenth day of the month following the end of the previous payment period.

(g) The department may allow dealers to charge customers the deposit value beginning November 1, 2004; provided that the containers are clearly marked with the deposit value and the deposit beverage distributor has paid the deposit on each container to the department. The dealer shall inform customers that deposits paid prior to January 1, 2005, shall not be redeemable until January 1, 2005."

SECTION 12. Section 342G-113, Hawaii Revised Statutes, is amended by amending subsections (a) through (d) to read as follows:

"(a) Except as provided in subsection (b), a dealer shall:

(1) Operate a redemption center by [accepting] July 1, 2005, and shall accept all types of empty deposit beverage containers with a Hawaii refund value;

(2) Pay to the redeemer the full refund value for all deposit beverage containers [which] that 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-119, or rules adopted under this part.

(b) Subsection (a) shall not apply to any dealer:

(1) Who is located in a high density population area as defined by the director in rules, and within two miles of a certified redemption center that is operated independently [from] of a dealer;

(2) Who is located in a rural area as defined by rule;

(3) Who subcontracts with a certified redemption center [for operation] to be operated on the dealer's premises;

(4) Whose [sale] sales of deposit beverage containers are only via vending machines;

(5) Whose place of business is less than five thousand square feet of interior space;

(6) Who can demonstrate physical hardship, or financial hardship, or both, based on specific criteria established [in rules;] by rule; or

(7) Who [meet] meets other criteria established by the director.

Notwithstanding paragraphs (1) and (2), the director may allow the placement of redemption centers at greater than prescribed distances to accommodate geographical features while [assuring] ensuring adequate consumer convenience.

(c) [All dealers, regardless] Regardless of the square footage of [the] a dealer's place of business, dealers who are not redemption centers shall post a clear and conspicuous sign at [each] the primary public entrance [to] of the dealer's place of business[, which] that specifies the name, address, and hours of operation of the closest redemption center locations.

(d) If there is no redemption center within the two-mile radius of a dealer due to the criteria described in subsection (b), 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."

SECTION 13. Section 342G-114, Hawaii Revised Statutes, is amended by amending subsections (b) through (d) to read as follows:

"(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,] department may review the certification of a redemption center[.] at any time. 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,] department, 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 in either cash or a redeemable voucher for all deposit beverage containers, except as provided in section 342G-116;

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

(5)] (4) 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)] (5) Forward the documentation necessary to support claims for payment as stated in section 342G-119."

SECTION 14. Section 342G-115, Hawaii Revised Statutes, is amended to read as follows:

"[[]§342G-115[]] Reverse vending machine requirements. Reverse vending machines may be used by redemption centers to satisfy the requirements of section 342G-113[; provided that the reverse]. Reverse vending [machine] machines shall accept any type of empty deposit beverage container and pay out [appropriate refunds via] the full refund value in either cash or 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.]"

SECTION 15. Section 342G-117, Hawaii Revised Statutes, is amended by amending subsections (a), (b), and (c) to read as follows:

"(a) The [State] department shall pay to each certified redemption center a handling fee of not less than the prevailing deposit beverage container fee for each deposit beverage container redeemed by a consumer [which] that is [transported]:

(1) Transported out-of-state; [or received]

(2) Received by an approved in-state company for an approved end use for recycling; or [received]

(3) Received by a [department permitted] department-permitted recycling facility.

The amount of the handling fee shall be based on criteria specified by rule.

(b) [Not less than thirty days before paying the handling fees 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 handling fee will be paid. Payments for handling fees shall be made not less than six months after the completion of the calendar quarter to which the payment applies.] The department shall evaluate the handling fee no fewer than once per year. If the department changes the amount of the handling fee, the department shall publish notice of the change within thirty days of its determination.

(c) The handling fee shall be paid in addition to the refund value of each [such] empty deposit beverage container. Payments for handling fees shall be based on redemption center reports submitted to the department; provided there is no discrepancy in the reports. The department may choose to pay the handling fee 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."

SECTION 16. Section 342G-119, Hawaii Revised Statutes, is amended to read as follows:

"[[]§342G-119[]] Redemption center reporting. The [State] department shall pay certified redemption centers handling fees and refund values as described in [[]section[]] 342G-117, based on collection reports submitted by the redemption centers. All redemption centers shall submit to the department[,] the following information on forms prescribed by the department[. Information], which information shall include at a minimum:

(1) The [amount and type of containers accepted and rejected;] number or weight of deposit beverage containers of each material type accepted at the redemption center for the reporting period;

(2) The amount of refunds paid out[;] by material type;

(3) The [amount and] number or weight of [each type of] deposit beverage containers of each material type transported out-of-state[,] or to a permitted recycling facility; and

(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]."

SECTION 17. Section 342G-105, Hawaii Revised Statutes, is repealed.

["[§342G-105] Deposit beverage container inventory report and payment. (a) Beginning October 1, 2002, payment of the deposit beverage container fee and deposits as described in section 342G-110 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 sum of the prevailing deposit beverage container fee and 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."]

SECTION 18. If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act, which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 19. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 20. This Act shall take effect upon its approval.