HBA-EDN H.B. 2291 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2291 By: Lewis, Glenn Environmental Regulation 3/30/2001 Introduced BACKGROUND AND PURPOSE The extensive amount of roadside litter in the sixties and early seventies, much of which was no-deposit, no-return beer and soda cans and bottles, prompted environmentalists to propose so-called bottle bills in their state legislatures that would place a mandatory refundable deposit on beer and soft drink containers. In 1971, Oregon passed the nation's first bottle bill, and by 1987, a number of states had enacted some form of beverage container deposit law or bottle bill. Bottle bills were intended not only to reduce beverage container litter, but also to conserve natural resources through recycling and reducing the amount of solid waste going to landfills, and they have been successful in their efforts. States with deposit laws have reported a dramatic reduction in litter and much higher recycling rates, compared to states that do not have such laws. Bottle bills have proven to be a sustainable method of ensuring a high rate of recycling by providing a monetary incentive to return the container. House Bill 2291 requires the Texas Natural Resource Conservation Commission to establish a beverage container redemption and recycling program. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Natural Resource Conservation Commission in SECTION 1 (Secs. 374.002, 374.154, and 374.155, Health and Safety Code) and SECTION 3, and to the comptroller of public accounts in SECTION 1 (Sec. 374.101, Health and Safety Code) and SECTION 3 of this bill. ANALYSIS House Bill 2291 amends the Health and Safety Code to require the Texas Natural Resource Conservation Commission (TNRCC) to establish a beverage container redemption and recycling program (program) (Sec. 374.002). The bill prohibits a person from selling or offering for sale in this state a beverage container unless the container has a refund value of five cents or more and is labeled as required by TNRCC. The bill authorizes the sale of certain beverage containers that do not have refund values and authorizes TNRCC to require that any beverage container intended for sale in this state be printed, embossed, stamped, labeled, or otherwise marked with a universal product code or similar machine-readable indicia (Secs. 374.051 and 374.052). The bill requires a retail dealer to collect a redemption fee of five cents from a consumer for each beverage container sold and to remit to the comptroller of public accounts (comptroller) 4.75 cents of each five-cent redemption fee. The comptroller is required by rule to adopt procedures for remitting such a redemption fee (Sec. 374.101). The bill requires a retail dealer that sells beverage containers for which a refund value is required to post conspicuously a notice to purchasers of the refund value of a used beverage container and the location of the nearest redemption center (Sec. 374.156). The bill requires a redemption center to accept a used beverage container that has a refund value and to pay the refund value in cash to the person presenting the container if the brand and refund value are ascertainable from the container or the container is an unbroken refillable glass beverage container that is widely known to have a refund value of five cents or more (Sec. 374.201). The bill provides that a person commits a Class C misdemeanor if the person knowingly violates these provisions (Sec. 374.003). A retailer who collects a redemption fee is required to report to the comptroller, not later than March 1 of each year, the total amount of fees collected for the preceding calendar year and any other information the comptroller considers necessary. TNRCC is also required to include information on the program in its annual report to the legislature (Secs. 374.004 and 374.102). The bill requires redemption fees collected to be deposited to the credit of the Texas beverage redemption and recycling account (account) in the general revenue fund and authorizes the funds to be appropriated to TNRCC only for reimbursement and handling fees paid to redemption centers, administration of these provisions, and certain grants related to recycling and litter reduction strategies. The bill requires TNRCC to allocate money for such grants after setting aside amounts for the other authorized appropriations. TNRCC is also required to ensure that the account contains a reserve amount to be used for contingencies that is equal to five percent of the total amount paid to redemption centers in the preceding calendar year and any amount of interest earned on this reserved amount (Sec. 374.103). The bill authorizes a redemption center to refuse to accept for refund a glass bottle that is broken to the extent that it would present a safety hazard when handled, a used beverage container that contains part of its original contents or other foreign matter to the extent that it could present health or sanitation problems, or more than 240 used beverage containers presented by a single person in one day. The bill sets forth provisions regarding redemption centers' disposal of beverage containers and reimbursement of fees by TNRCC (Secs. 374.202-374.204). The bill sets forth provisions regarding the establishment, certification, and operation of redemption centers. TNRCC is required, by rule, to adopt a procedure for the certification of redemption centers and is required to adopt rules for the operation of a redemption center. The bill requires TNRCC to administer and enforce these provisions and authorizes TNRCC to adopt rules and forms necessary to carry out the purposes of these provisions (Sec. 374.002, 374.151-374.155, Health and Safety Code). The bill requires TNRCC and the comptroller, not later than September 1, 2002, to adopt the rules necessary to implement these provisions. The bill provides that the requirements of and penalties imposed by these provisions do not apply to any person before January 1, 2003 and that a retail dealer is not required to submit a report to TNRCC before March 1, 2004 (SECTION 3). The bill amends the Tax Code to provide that a beverage container redemption fee under these provisions is not included under the definition of "sales price" or "receipts" (Sec. 151.007). EFFECTIVE DATE September 1, 2001.