BILL ANALYSIS Senate Research Center S.B. 728 89R2897 DRS-F By: Johnson Natural Resources 4/10/2025 As Filed AUTHOR'S / SPONSOR'S STATEMENT OF INTENT Ten states and Guam have a deposit-refund system for beverage containers, encouraging consumers to recycle their beverage containers in order to save natural resources and preserve landfill space. These beverage container deposit laws incentivize recycling through similar deposit-refund systems, in which a consumer pays typically a five-cent deposit to the retailer per purchased beverage and receives a refund when the empty container is returned to a redemption center. At the federal level, there is draft legislation, called the Return Every Deposit for Effective Environmental Management (REDEEM) Act, to implement a nationwide beverage container recovery program. The federal program would establish a standardized bottle deposit system for the nation with deposits paid by consumers and unredeemed deposits used to upgrade material recovery facilities, collection capacity, and redemption centers at the federal government's discretion. Passage of this federal program before Texas establishes a state recycling incentive program would prohibit the state from keeping revenue generated from a state-wide program, meaning Texas would send state-generated revenue to the federal government. S.B. 728 would amend the Texas Health and Safety Code by adding Chapter 375 to establish a beverage container recycling incentive program. The deposit on all non-dairy beverage containers would be five cents as indicated by required labels, and consumers would be eligible to receive a refund of five cents per returned container at any redemption center. The recycling rate goal for the program by 2035 would be 65 percent, with additional plans in the case of failure to meet targets. Unredeemed refunds and membership fees collected from distributors would be included in the Recycling Refund Trust Fund for the purposes of maintaining, operating, and constructing redemption centers and paying refunds to consumers. Passage of the mentioned federal program before S.B. 728 would prohibit Texans from creating this Recycling Refund Trust Fund and instead direct revenue from a deposit-refund program to the federal government. As proposed, S.B. 728 amends current law relating to an incentive program to promote beverage container recycling. RULEMAKING AUTHORITY Rulemaking authority is expressly granted to the Texas Commission on Environmental Quality in SECTION 1 (Section 375.002, Health and Safety Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subtitle B, Title 5, Health and Safety Code, by adding Chapter 375, as follows: CHAPTER 375. BEVERAGE CONTAINER RECYCLING REFUND PROGRAM Sec. 375.001. DEFINITIONS. Defines "beverage," "beverage container," "commission," "consortium," "consumer," "redemption center," "refund," and "refund program." Sec. 375.002. RULES. Authorizes the Texas Commission on Environmental Quality (TCEQ) to adopt rules to administer this chapter. Authorizes TCEQ to consult the Texas Beverage Container Recycling Consortium established under this chapter (consortium) and the Municipal Solid Waste Management and Resource Recovery Advisory Council in developing for proposal rules to administer this chapter. Sec. 375.003. PRODUCERS. (a) Provides that, except as provided by Subsection (b), for purposes of this chapter, a person meeting certain criteria is considered to be the producer of a beverage sold, offered for sale, or distributed in or imported into this state. (b) Provides that a person is not considered to be a producer for purposes of this chapter if the person is a state, a federal or state agency, a political subdivision, or another governmental entity; is an organization that is exempt from federal income taxation under Section 501(a), Internal Revenue Code of 1986, by being listed as an exempt organization under Section 501(c)(3) or (4) of that code; or sells, offers for sale, or distributes in or imports into this state beverages in an amount that TCEQ determines to be a de minimis amount. Sec. 375.004. CONSORTIUM REQUIRED; NON-JOINING PRODUCERS. (a) Requires producers to form, and requires a producer to participate in, the consortium. Requires the consortium to be a nonprofit corporation under Chapter 22 (Nonprofit Corporations), Business Organizations Code, that is formed for the purpose of creating and implementing a plan to meet and maintain the recycling rate target provided by Section 375.009. (b) Authorizes the consortium to sue a producer that has not joined the consortium in an appropriate court to require compliance with the duty to join the consortium. Authorizes the consortium to recover court costs and attorney's fees if it prevails in a suit brought under this subsection. (c) Requires the consortium to establish labeling standards for beverage containers covered by this chapter to inform the consumer of the refund amount provided on return of the beverage container, establish quality standards for beverage containers accepted for refund, and collect and provide to TCEQ information necessary to enable TCEQ to determine the biennial recycling rate for beverage containers collected through redemption centers, curbside recycling programs, and other means. Sec. 375.005. RECYCLING REFUND TRUST FUND. Requires that money, including beverage container deposits, collected under this chapter be deposited to the credit of a recycling refund trust fund maintained by the consortium in a depository chosen by the consortium. Provides that money in the trust fund is authorized to be allocated and spent only for certain purposes. Sec. 375.006. COMPTROLLER OVERSIGHT; RESERVES. Authorizes the Comptroller of Public Accounts of the State of Texas (comptroller) to require the consortium to provide financial information, conduct financial audits of the refund program, and require the consortium to maintain reserves in an amount determined by the comptroller in accordance with applicable financial accounting standards. Sec. 375.007. LABEL AND DEPOSIT REQUIRED. (a) Prohibits a person from selling, offering for sale, or distributing in or importing into this state a beverage in a beverage container unless the beverage container meets labeling standards established by the consortium. (b) Prohibits a person from selling at retail in this state a beverage in a beverage container unless the person collects or provides for the collection of a deposit on the beverage container in a manner established by the consortium. Sec. 375.008. DEPOSITS AND REFUNDS FOR BEVERAGE CONTAINERS. Requires the consortium to establish efficient, convenient, and cost-effective procedures for the collection of a beverage container deposit and payment of deposit refunds. Sec. 375.009. RECYCLING RATE TARGET FOR BEVERAGE CONTAINERS. (a) Requires the consortium to implement a plan to meet and maintain an average biennial recycling rate for beverage containers sold or distributed in or imported into this state of not less than 75 percent by January 1, 2035. (b) Authorizes TCEQ, if the consortium does not meet the recycling rate target provided by Subsection (a) before the second anniversary of the date the consortium was required to meet the target under that subsection, to require the consortium to remit to the state all or part of the money in the recycling refund trust fund established under Section 375.005. Requires the comptroller to hold money remitted under this subsection until the consortium or another organization provides to TCEQ a corrective plan to meet the recycling rate target provided by Subsection (a). (c) Requires the comptroller, on approval by TCEQ of the corrective plan, to release the money remitted and held under Subsection (b) to the consortium or other organization responsible for the plan. (d) Authorizes TCEQ to audit the consortium for accuracy and adherence to the recycling rate target provided by Subsection (a). Requires the consortium to reimburse TCEQ for the cost incurred by TCEQ in the audit process. SECTION 2. (a) Requires TCEQ, not later than September 1, 2026, to adopt rules for the implementation of Chapter 375, Health and Safety Code, as added by this Act. Authorizes TCEQ, to facilitate the approval of the structure and organization of the consortium and the consortium's initial plan, to adopt the initial rules in the manner provided by law for emergency rules. (b) Requires a producer or other person subject to the requirements imposed by the consortium plan adopted under Chapter 375, Health and Safety Code, as added by this Act, except as otherwise provided by this Act, to comply with those requirements beginning January 1, 2028. SECTION 3. (a) Effective date, except as provided by Subsection (b) of this section: September 1, 2025. (b) Effective date, Section 375.007, Health and Safety Code, as added by this Act: October 1, 2028.
BILL ANALYSIS
Senate Research Center S.B. 728
89R2897 DRS-F By: Johnson
Natural Resources
4/10/2025
As Filed
Senate Research Center
S.B. 728
89R2897 DRS-F
By: Johnson
Natural Resources
4/10/2025
As Filed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Ten states and Guam have a deposit-refund system for beverage containers, encouraging consumers to recycle their beverage containers in order to save natural resources and preserve landfill space. These beverage container deposit laws incentivize recycling through similar deposit-refund systems, in which a consumer pays typically a five-cent deposit to the retailer per purchased beverage and receives a refund when the empty container is returned to a redemption center.
At the federal level, there is draft legislation, called the Return Every Deposit for Effective Environmental Management (REDEEM) Act, to implement a nationwide beverage container recovery program. The federal program would establish a standardized bottle deposit system for the nation with deposits paid by consumers and unredeemed deposits used to upgrade material recovery facilities, collection capacity, and redemption centers at the federal government's discretion. Passage of this federal program before Texas establishes a state recycling incentive program would prohibit the state from keeping revenue generated from a state-wide program, meaning Texas would send state-generated revenue to the federal government.
S.B. 728 would amend the Texas Health and Safety Code by adding Chapter 375 to establish a beverage container recycling incentive program. The deposit on all non-dairy beverage containers would be five cents as indicated by required labels, and consumers would be eligible to receive a refund of five cents per returned container at any redemption center. The recycling rate goal for the program by 2035 would be 65 percent, with additional plans in the case of failure to meet targets. Unredeemed refunds and membership fees collected from distributors would be included in the Recycling Refund Trust Fund for the purposes of maintaining, operating, and constructing redemption centers and paying refunds to consumers. Passage of the mentioned federal program before S.B. 728 would prohibit Texans from creating this Recycling Refund Trust Fund and instead direct revenue from a deposit-refund program to the federal government.
As proposed, S.B. 728 amends current law relating to an incentive program to promote beverage container recycling.
RULEMAKING AUTHORITY
Rulemaking authority is expressly granted to the Texas Commission on Environmental Quality in SECTION 1 (Section 375.002, Health and Safety Code) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Subtitle B, Title 5, Health and Safety Code, by adding Chapter 375, as follows:
CHAPTER 375. BEVERAGE CONTAINER RECYCLING REFUND PROGRAM
Sec. 375.001. DEFINITIONS. Defines "beverage," "beverage container," "commission," "consortium," "consumer," "redemption center," "refund," and "refund program."
Sec. 375.002. RULES. Authorizes the Texas Commission on Environmental Quality (TCEQ) to adopt rules to administer this chapter. Authorizes TCEQ to consult the Texas Beverage Container Recycling Consortium established under this chapter (consortium) and the Municipal Solid Waste Management and Resource Recovery Advisory Council in developing for proposal rules to administer this chapter.
Sec. 375.003. PRODUCERS. (a) Provides that, except as provided by Subsection (b), for purposes of this chapter, a person meeting certain criteria is considered to be the producer of a beverage sold, offered for sale, or distributed in or imported into this state.
(b) Provides that a person is not considered to be a producer for purposes of this chapter if the person is a state, a federal or state agency, a political subdivision, or another governmental entity; is an organization that is exempt from federal income taxation under Section 501(a), Internal Revenue Code of 1986, by being listed as an exempt organization under Section 501(c)(3) or (4) of that code; or sells, offers for sale, or distributes in or imports into this state beverages in an amount that TCEQ determines to be a de minimis amount.
Sec. 375.004. CONSORTIUM REQUIRED; NON-JOINING PRODUCERS. (a) Requires producers to form, and requires a producer to participate in, the consortium. Requires the consortium to be a nonprofit corporation under Chapter 22 (Nonprofit Corporations), Business Organizations Code, that is formed for the purpose of creating and implementing a plan to meet and maintain the recycling rate target provided by Section 375.009.
(b) Authorizes the consortium to sue a producer that has not joined the consortium in an appropriate court to require compliance with the duty to join the consortium. Authorizes the consortium to recover court costs and attorney's fees if it prevails in a suit brought under this subsection.
(c) Requires the consortium to establish labeling standards for beverage containers covered by this chapter to inform the consumer of the refund amount provided on return of the beverage container, establish quality standards for beverage containers accepted for refund, and collect and provide to TCEQ information necessary to enable TCEQ to determine the biennial recycling rate for beverage containers collected through redemption centers, curbside recycling programs, and other means.
Sec. 375.005. RECYCLING REFUND TRUST FUND. Requires that money, including beverage container deposits, collected under this chapter be deposited to the credit of a recycling refund trust fund maintained by the consortium in a depository chosen by the consortium. Provides that money in the trust fund is authorized to be allocated and spent only for certain purposes.
Sec. 375.006. COMPTROLLER OVERSIGHT; RESERVES. Authorizes the Comptroller of Public Accounts of the State of Texas (comptroller) to require the consortium to provide financial information, conduct financial audits of the refund program, and require the consortium to maintain reserves in an amount determined by the comptroller in accordance with applicable financial accounting standards.
Sec. 375.007. LABEL AND DEPOSIT REQUIRED. (a) Prohibits a person from selling, offering for sale, or distributing in or importing into this state a beverage in a beverage container unless the beverage container meets labeling standards established by the consortium.
(b) Prohibits a person from selling at retail in this state a beverage in a beverage container unless the person collects or provides for the collection of a deposit on the beverage container in a manner established by the consortium.
Sec. 375.008. DEPOSITS AND REFUNDS FOR BEVERAGE CONTAINERS. Requires the consortium to establish efficient, convenient, and cost-effective procedures for the collection of a beverage container deposit and payment of deposit refunds.
Sec. 375.009. RECYCLING RATE TARGET FOR BEVERAGE CONTAINERS. (a) Requires the consortium to implement a plan to meet and maintain an average biennial recycling rate for beverage containers sold or distributed in or imported into this state of not less than 75 percent by January 1, 2035.
(b) Authorizes TCEQ, if the consortium does not meet the recycling rate target provided by Subsection (a) before the second anniversary of the date the consortium was required to meet the target under that subsection, to require the consortium to remit to the state all or part of the money in the recycling refund trust fund established under Section 375.005. Requires the comptroller to hold money remitted under this subsection until the consortium or another organization provides to TCEQ a corrective plan to meet the recycling rate target provided by Subsection (a).
(c) Requires the comptroller, on approval by TCEQ of the corrective plan, to release the money remitted and held under Subsection (b) to the consortium or other organization responsible for the plan.
(d) Authorizes TCEQ to audit the consortium for accuracy and adherence to the recycling rate target provided by Subsection (a). Requires the consortium to reimburse TCEQ for the cost incurred by TCEQ in the audit process.
SECTION 2. (a) Requires TCEQ, not later than September 1, 2026, to adopt rules for the implementation of Chapter 375, Health and Safety Code, as added by this Act. Authorizes TCEQ, to facilitate the approval of the structure and organization of the consortium and the consortium's initial plan, to adopt the initial rules in the manner provided by law for emergency rules.
(b) Requires a producer or other person subject to the requirements imposed by the consortium plan adopted under Chapter 375, Health and Safety Code, as added by this Act, except as otherwise provided by this Act, to comply with those requirements beginning January 1, 2028.
SECTION 3. (a) Effective date, except as provided by Subsection (b) of this section: September 1, 2025.
(b) Effective date, Section 375.007, Health and Safety Code, as added by this Act: October 1, 2028.