88R9026 DRS-F
By: Johnson S.B. No. 2419
A BILL TO BE ENTITLED
AN ACT
relating to an incentive program to promote beverage container
recycling; imposing a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle B, Title 5, Health and Safety Code, is
amended by adding Chapter 375 to read as follows:
CHAPTER 375. BEVERAGE CONTAINER RECYCLING REFUND PROGRAM
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 375.001. DEFINITIONS. In this chapter:
(1) "Beverage" means an alcoholic, nonalcoholic,
carbonated, or noncarbonated drink prepared in liquid,
ready-to-drink form and intended for human consumption.
(2) "Beverage container" means a glass, metal, or
plastic vessel that is hermetically sealed or capped and that
contains a beverage at the time it is sold or offered for sale. The
term does not include a container that:
(A) has a fluid capacity of more than one gallon;
(B) contains milk or another dairy product;
(C) contains infant formula, including any
liquid food sold as an alternative for human milk for the feeding of
infants; or
(D) contains medical food, including:
(i) a liquid food that is formulated to be
consumed or administered under the supervision of a physician and
that is intended for specific dietary management of diseases or
health conditions for which distinctive nutritional requirements,
based on recognized scientific principles, are established by
medical evaluation; and
(ii) a product that meets the definition of
a medical food under Section 5(b) of the Orphan Drug Act (21 U.S.C.
Section 360ee(b)).
(3) "Commission" means the Texas Commission on
Environmental Quality.
(4) "Consortium" means the Texas Beverage Container
Recycling Consortium established under this chapter.
(5) "Consumer" means a person who purchases at retail
a beverage in a beverage container. The term includes a lodging,
eating, or drinking establishment if beverages are generally
consumed on the establishment's premises. The term does not
include a person who purchases a beverage from a lodging, eating, or
drinking establishment for consumption on the establishment's
premises.
(6) "Dealer" means a person in this state that sells to
a consumer a sealed beverage in a beverage container.
(7) "Distributor" means a person that sells beverages
in beverage containers to a dealer in this state. The term includes
a manufacturer or importer and a dealer that self-distributes its
own brand.
(8) "Manufacturer" means a person that fills beverage
containers for sale to a distributor or dealer.
(9) "Redemption center" means a manned or unmanned
operation approved by the consortium under this chapter that
redeems returned empty beverage containers by collecting beverage
containers from persons who deliver to the operation beverage
containers and issuing to a person delivering beverage containers a
refund for each with a value not less than the beverage container's
refund value.
(10) "Refund" means a payment by a redemption center
under Section 375.101 to a person who presents a beverage container
at the redemption center.
(11) "Refund program" means the beverage container
recycling program established under this chapter.
Sec. 375.002. RULES. The comptroller may adopt rules to
administer this chapter. The comptroller shall consult the
consortium, the advisory committee established under Section
375.003, and the commission in developing for proposal rules to
administer this chapter.
Sec. 375.003. ADVISORY COMMITTEE. (a) The comptroller
shall appoint an advisory committee to advise the comptroller and
the consortium on the implementation of this chapter. In
considering persons to appoint to the advisory committee, the
comptroller shall consult the consortium and the commission.
(b) The advisory committee is composed of the following nine
members:
(1) one distributor of alcoholic beverages;
(2) one distributor of nonalcoholic beverages;
(3) one recycler;
(4) one beverage retailer;
(5) one member representing the waste industry;
(6) one owner or operator of a redemption center;
(7) one member representing a container processor or
remanufacturer;
(8) one representative of a municipality with a
population of less than 10,000; and
(9) one representative of a municipality with a
population of 10,000 or more.
(c) A member of the advisory committee serves at the will of
the comptroller.
Sec. 375.004. ANNUAL REPORT. Not later than November 1 of
each year, the consortium shall submit a report to the lieutenant
governor, the speaker of the house of representatives, the
comptroller, the commission, and the committee in each house of the
legislature that has primary jurisdiction over environmental
matters about the progress and success of the refund program. The
report must be submitted electronically in a format prescribed by
the officer or entity to which the report is transmitted.
SUBCHAPTER B. TEXAS BEVERAGE CONTAINER RECYCLING CONSORTIUM
Sec. 375.051. CONSORTIUM AND APPROVED PLAN REQUIRED;
NON-JOINING DISTRIBUTORS; MEMBERSHIP FEES. (a) Distributors shall
form, and a distributor shall participate in, the Texas Beverage
Container Recycling Consortium. The consortium must be a nonprofit
corporation under Chapter 22, Business Organizations Code, that is
formed for the purpose of creating and implementing a plan to meet
the requirements of this chapter. The consortium's organizational
and operational structure must be approved by the comptroller.
(b) The consortium shall develop a plan in accordance with
Section 375.052 and submit the plan to the comptroller for
approval. The comptroller's approval of the consortium's plan
submitted under this subsection constitutes the comptroller's
initial approval of the nonprofit corporation for purposes of
Subsection (a). The comptroller may approve the initial plan on a
provisional basis and require an amended plan to be submitted not
later than a date established by the comptroller.
(c) A distributor may not sell or supply beverages in
beverage containers in this state if the distributor has not joined
the consortium.
(d) The consortium may sue a distributor that has not joined
the consortium in an appropriate court to require compliance with
the duty to join the consortium and to enforce Subsection (c). The
consortium may recover court costs and attorney's fees if it
prevails in a suit brought under this subsection.
(e) The consortium shall assess and collect membership fees
from its members in accordance with Section 375.054.
Sec. 375.052. PLAN REQUIREMENTS. To be approved under this
subchapter, a plan must:
(1) be based on objective and measurable criteria to
the extent possible;
(2) include provisions sufficient to enable the
comptroller to determine:
(A) whether the consortium, distributors,
redemption centers, and other affected persons are in compliance
with the plan and this chapter; and
(B) whether the plan is cost-effective and
sufficiently convenient to the public;
(3) establish reasonable standards and guidelines to
ensure that redemption centers are efficient, cost-effective, and
convenient for the public;
(4) show how the consortium will encourage public
participation in the program and require distributor compliance
with this chapter;
(5) include a marketing plan to provide information
and educate consumers about the refund program;
(6) include requirements to ensure transparency and
adequate recordkeeping to facilitate audits of the refund program
by the comptroller or the consortium;
(7) include an operating budget for the refund
program;
(8) show how the consortium will ensure the solvency
of the recycling refund trust fund;
(9) provide for a system for payment of the deposit by
consumers at point of sale and transferring the deposit to the
recycling refund trust fund;
(10) provide for a system for monitoring the number of
beverages in beverage containers sold by distributors in or into
this state and the number of beverage containers returned to
redemption centers and curbside recycling programs;
(11) provide for a system to prevent fraudulent use of
the refund program through current statutes prohibiting fraud and
theft that includes cost-effective measures to ensure to the extent
possible that beverage containers purchased outside of this state
are not returned for refund under this chapter;
(12) describe how the consortium will administer the
recycling refund trust fund under Section 375.056;
(13) prescribe procedures and forms necessary to
implement the plan and this chapter;
(14) provide a link to a publicly accessible Internet
website developed and maintained by the consortium that provides
information about the program, including redemption center
locations;
(15) prescribe labeling standards for manufacturers
and distributors;
(16) include standards and procedures for payment by
the consortium to curbside collection programs for beverage
containers collected at curbside based on the number of containers
collected and the quality of those containers as compared to the
quality of containers collected at redemption centers;
(17) include standards for efficiently and
cost-effectively approving redemption centers operated by a local
government or private operator;
(18) include standards for making refund payments
based on the weight of returned beverage containers;
(19) include standards for material acceptance and
refusal by redemption centers;
(20) establish requirements and standards for
information necessary to compute a recycling rate for beverage
containers collected through redemption centers; and
(21) to the extent feasible, establish requirements
and standards for information necessary to compute a recycling rate
for beverage containers collected through curbside recycling
programs and other means.
Sec. 375.053. PLAN APPROVAL; APPLICABILITY OF APPROVED
PLAN. (a) Before approving the consortium's plan submitted under
Section 375.051(b), the comptroller:
(1) shall consult the advisory committee;
(2) shall publish notice and the text of the proposed
plan on the comptroller's Internet website;
(3) shall provide a reasonable period for and solicit
comments from the public, distributors, dealers, manufacturers,
and other interested persons, including local government entities
and other persons involved in collection efforts;
(4) may hold workshops or informal hearings on the
proposed plan; and
(5) may allow the consortium to amend the proposed
plan in response to comments from the comptroller or the public.
(b) The comptroller may approve the plan only if the
comptroller determines that the plan:
(1) complies with Section 375.052;
(2) is supported by the available evidence; and
(3) will accomplish the purposes of this chapter in a
manner that is feasible, well-founded, cost-effective, and
convenient to the public.
(c) Standards, procedures, guidelines, and requirements
established in a plan approved by the comptroller are binding, as
applicable, on:
(1) persons engaged in commerce involving beverage
containers in this state, to the extent allowed under federal law;
(2) persons and local government entities engaged in
collecting or sorting for recycling or other disposition used
beverage containers; and
(3) redemption centers.
(d) Plan amendments must be approved by the comptroller in
accordance with this section.
Sec. 375.054. CONSORTIUM FINANCES; FEES PAID BY CONSORTIUM
MEMBERS. (a) The consortium shall charge distributors a
membership fee. The fee must be set in an amount that is sufficient
to cover the cost to the consortium of implementing the plan and
administering this chapter, including the cost of:
(1) operating and maintaining, or providing for the
operation and maintenance of, redemption centers built or operated
under this chapter; and
(2) paying to the comptroller an amount equal to the
comptroller's costs and the commission's costs incurred in
administering this chapter, as directed by the comptroller.
(b) The consortium shall provide to the comptroller a
description of how the consortium computes and sets the membership
fee and the process by which the consortium collects the fee from
distributors.
(c) The amount of the membership fee to be paid by a
distributor must be:
(1) generally proportional to the relative number of
beverage containers that the distributor introduces into the stream
of commerce in this state; and
(2) based on a reasonable estimate and consideration
of the cost to the consortium of collecting and processing for
recycling or other disposal the distributor's beverage containers.
(d) The consortium shall add to the amount of the membership
fee to be paid by a distributor the consortium's best reasonable
estimate of the cost to the consortium of:
(1) collecting, processing, and disposing of beverage
containers the distributor introduces into the stream of commerce
in this state that are difficult to recycle or unsuitable for
recycling; and
(2) higher payments made to curbside collection
programs due to containers described by Subdivision (1).
(e) The consortium shall establish a date on which the
membership fee charged to a distributor under this section is due.
If a distributor is more than 180 days delinquent in payment of a
fee, the consortium may bring suit to recover the fee, court costs,
and reasonable attorney's fees.
Sec. 375.055. CERTAIN BEVERAGE DONATIONS. A manufacturer
or distributor that donates beverages shall pay to the consortium
the required deposit for the donated beverage containers in the
manner prescribed by the consortium.
Sec. 375.056. RECYCLING REFUND TRUST FUND. Deposits
collected under this chapter, including deposits collected under
Section 375.055, and membership fees collected from distributors
shall be deposited to the credit of a recycling refund trust fund
maintained by the consortium in a depository chosen by the
consortium. Except as provided by Section 375.152(b), money in the
trust fund may be allocated and expended only for:
(1) construction, operation, and maintenance of
redemption centers;
(2) operation of technology-based redemption centers,
including reverse vending machines and bag-drop receptacles, that
provide convenient cost-effective methods of paying refunds;
(3) leasing agreements and liability insurance on
redemption centers;
(4) appropriate payments to curbside recycling
programs for beverage containers that, based on reliable data
submitted to the consortium by a program, meet quality standards
determined by the consortium and are ultimately recycled;
(5) making refund payments to persons who return a
beverage container to a redemption center and receive a refund;
(6) reimbursing a local government entity or
independent entity operating a redemption center, as authorized by
the consortium, for refunds paid to persons returning beverage
containers;
(7) providing information to and educating consumers
about the refund program; and
(8) administering this chapter and reimbursing the
comptroller and the commission for costs incurred in administering
this chapter.
Sec. 375.057. COMPTROLLER OVERSIGHT; RESERVES. The
comptroller may:
(1) require the consortium to provide financial
information;
(2) conduct financial audits of the refund program;
and
(3) require the consortium to maintain reserves in an
amount determined by the comptroller in accordance with applicable
financial accounting standards.
Sec. 375.058. LABEL REQUIRED. (a) A person may not
distribute, sell, or offer for sale in this state a beverage in a
beverage container unless the beverage container meets labeling
standards established by the consortium in a plan approved by the
comptroller.
(b) A person may not sell at retail in this state a beverage
in a beverage container unless the person collects or provides for
the collection of the deposit on the beverage container in
accordance with Subchapter C and in a manner established by the
consortium in a plan approved by the comptroller.
SUBCHAPTER C. DEPOSITS AND REFUNDS FOR BEVERAGE CONTAINERS;
REDEMPTION CENTERS
Sec. 375.101. AMOUNT OF DEPOSIT AND REFUND FOR BEVERAGE
CONTAINERS. (a) The deposit on a beverage container is five cents.
(b) A person who returns a beverage container to a
redemption center is eligible to receive a refund of five cents for
the returned container.
Sec. 375.102. PROCEDURES. The consortium shall establish
efficient, convenient, and cost-effective procedures for
collection of the beverage container deposit and payment of the
deposit refunds.
Sec. 375.103. REDEMPTION CENTERS. (a) A person or local
governmental entity may not operate a redemption center without the
consortium's approval.
(b) A person or local governmental entity that operates a
redemption center must do so according to standards and guidelines
established by the consortium.
SUBCHAPTER D. RECYCLING TARGETS
Sec. 375.151. RECYCLING TARGETS FOR BEVERAGE CONTAINERS.
(a) The consortium shall implement a plan approved under this
chapter to meet the following recycling rates for beverage
containers sold or distributed in this state:
(1) not less than 35 percent, beginning January 1,
2027;
(2) not less than 50 percent, beginning January 1,
2031;
(3) not less than 65 percent, beginning January 1,
2035; and
(4) an average rate of not less than 65 percent during
each four-year period after January 1, 2035.
(b) The recycling rate is computed by dividing the number of
beverage containers that are recovered and recycled in a year by the
total number of beverage containers sold or distributed in this
state during that year.
(c) The number of beverage containers that are recovered and
recycled in a year is the sum of:
(1) the number of beverage containers that are
recovered at redemption centers and recycled in accordance with
this chapter; and
(2) the comptroller's estimated number of beverage
containers recovered and ultimately recycled as a result of
curbside collection, commercial contracts for collection and
recycling, and other recycling methods in this state not described
by Subdivision (1).
(d) The comptroller by rule may establish an alternative
method of computing the recycling rate as necessary for accuracy
and feasibility of implementation.
Sec. 375.152. FAILURE TO MEET RECYCLING TARGETS. (a) If
the consortium does not meet a year's recycling rate target
provided by Section 375.151, the consortium shall take additional
steps to raise the recycling rate, including making increases to:
(1) public outreach;
(2) the number of redemption centers; and
(3) the deposit and refund to 10 cents per beverage
container.
(b) If the consortium does not meet the recycling rate
target provided by Section 375.151 before the second anniversary of
the date the consortium was required to take additional steps under
Subsection (a), the comptroller may require the consortium to remit
to the state all or part of the money in the recycling refund trust
fund established under Section 375.056. The comptroller shall hold
money remitted under this subsection until the consortium or
another organization provides to the comptroller a corrective plan
to meet the recycling targets under this chapter.
(c) The comptroller shall consult with the advisory
committee before approving the corrective plan and releasing the
money remitted and held under Subsection (b) to the consortium or
other organization responsible for the approved corrective plan.
(d) The comptroller may audit the consortium for accuracy
and adherence to recycling targets under this chapter. The
consortium shall reimburse the comptroller for the cost incurred by
the comptroller in the audit process.
SECTION 2. (a) Not later than September 1, 2024, the
comptroller shall adopt rules for the implementation of Chapter
375, Health and Safety Code, as added by this Act. To facilitate
the approval of the structure and organization of the Texas
Beverage Container Recycling Consortium and the consortium's
initial plan, the comptroller may adopt the initial rules in the
manner provided by law for emergency rules.
(b) Except as otherwise provided by this Act, a dealer,
distributor, manufacturer, redemption center, or other person
subject to requirements imposed by the consortium plan adopted and
approved under Chapter 375, Health and Safety Code, as added by this
Act, shall comply with those requirements beginning January 1,
2025.
(c) The consortium shall submit the initial report required
by Section 375.004, Health and Safety Code, as added by this Act,
not later than November 1, 2025.
SECTION 3. (a) Except as provided by Subsections (b) and
(c) of this section, this Act takes effect September 1, 2023.
(b) Section 375.051(c), Health and Safety Code, as added by
this Act, takes effect October 1, 2025.
(c) Section 375.058, Health and Safety Code, as added by
this Act, takes effect January 1, 2025.