Product stewardship program for packaging materials and labeling requirements establishment

1.1 A bill for an act​ 1.2 relating to solid waste; establishing product stewardship program for packaging​ 1.3 materials; establishing labeling requirements; requiring reports; requiring​ 1.4 rulemaking; proposing coding for new law in Minnesota Statutes, chapter 115A.​ 1.5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:​ 1.6 Section 1. [115A.1421] DEFINITIONS.​ 1.7 (a) For purposes of sections 115A.1421 to 115A.1443, the terms defined in this section​ 1.8 have the meanings given.​ 1.9 (b) "Brand" means a name, symbol, word, or mark that identifies a product, rather than​ 1.10 its components, and attributes the product to the owner of the name, symbol, word, or mark.​ 1.11 (c) "Commissioner" means the commissioner of the Pollution Control Agency.​ 1.12 (d) "Compost" means a stable humus-like material produced by the controlled biological​ 1.13 decomposition of organic matter through active management, but does not mean sewage,​ 1.14 septage, or materials derived from sewage or septage.​ 1.15 (e) "Compostable" means packaging that is certified by an independent third-party​ 1.16 certifier as capable of becoming compost through controlled aerobic biological​ 1.17 decomposition.​ 1.18 (f) "Contaminant" means a material that is:​ 1.19 (1) set out for recycling collection and is not properly prepared and on the list of materials​ 1.20 accepted for recycling collection by a recycling collection program; or​ 1.21 (2) shipped to a recycling end market and is not accepted or desired by that end market.​ 1​Section 1.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ SENATE​ STATE OF MINNESOTA​ S.F. No. 4518​NINETY-SECOND SESSION​ (SENATE AUTHORS: DZIEDZIC)​ OFFICIAL STATUS​D-PG​DATE​ Introduction and first reading​04/21/2022​ Referred to Environment and Natural Resources Policy and Legacy Finance​ 2.1 (g) "Contamination" means the presence of one or more contaminants in recyclable​ 2.2 materials in an amount or concentration that negatively impacts the value of the material​ 2.3 or negatively impacts a processor's ability to sort the material.​ 2.4 (h) "European article number" or "EAN" means a 13-digit barcode used for product​ 2.5 identification purposes.​ 2.6 (i) "Franchisee" means a person granted a license by a franchisor to use the franchisor's​ 2.7 trade name, service mark, or related characteristic and to share in the franchisor's proprietary​ 2.8 knowledge or processes under an oral or written agreement for a definite or indefinite period.​ 2.9 (j) "Franchisor" means a person that grants a license to a franchisee to use the person's​ 2.10 trade name, service mark, or related characteristic and to share in the person's proprietary​ 2.11 knowledge or processes under an oral or written agreement for a definite or indefinite period.​ 2.12 (k) "Low-volume producer" means a producer that sold, offered for sale, or distributed​ 2.13 for sale in or into the state during the previous calendar year products contained, protected,​ 2.14 delivered, presented, or distributed in or using more than one but less than 15 tons of​ 2.15 packaging material.​ 2.16 (l) "Material recovery facility" means a facility that receives, processes, and sells or​ 2.17 otherwise distributes postconsumer materials for recycling.​ 2.18 (m) "Minnesota Tribal governments" has the meaning given in section 10.65, subdivision​ 2.19 2, clause (4).​ 2.20 (n) "Municipality" means a statutory or home rule charter city, town, or regional​ 2.21 association acting on behalf of a city or town.​ 2.22 (o) "Nonreusable packaging" means packaging that is not reusable.​ 2.23 (p) "Packaging material" means any part of a package or container, including material​ 2.24 used for containing, protecting, handling, delivering, transporting, distributing, and presenting​ 2.25 a product that is sold, offered for sale, imported, or distributed in the state, including through​ 2.26 Internet transactions. Packaging materials includes bags and secondary or transport​ 2.27 packaging. Packaging material does not include:​ 2.28 (1) a discrete type of material intended to be used for long-term storage or protecting a​ 2.29 durable product that can be expected to be usable for that purpose for a period of at least​ 2.30 five years;​ 2.31 (2) a beverage container; or​ 2.32 (3) packaging that is reusable.​ 2​Section 1.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 3.1 (q) "Political subdivision" has the meaning given in section 13.02, subdivision 11.​ 3.2 (r) "Postconsumer recycled material" means new material that is produced from​ 3.3 recovering, separating, collecting, and reprocessing material originally sold for consumption​ 3.4 and that would otherwise be disposed of or processed as waste. Postconsumer recycled​ 3.5 material does not include postindustrial material, preconsumer material, or material generated​ 3.6 by combustion, incineration, pyrolysis, gasification, solvolysis, chemical recycling, or any​ 3.7 other high-heat or chemical conversion process.​ 3.8 (s) "Producer" means:​ 3.9 (1) an entity that manufactures or uses in a commercial enterprise, sells, offers for sale,​ 3.10 or distributes packaging material in the state under the brand of the manufacturer;​ 3.11 (2) an entity that is not the manufacturer of packaging material but is the owner or​ 3.12 licensee of a trademark under which the covered product is used in commercial enterprise,​ 3.13 sold, offered for sale, or distributed in the state, whether or not the trademark is registered;​ 3.14 or​ 3.15 (3) an entity that imports packaging material into the United States or the state for use​ 3.16 in a commercial enterprise, sale, offer for sale, or distribution in the state.​ 3.17 Producer includes a low-volume producer and a franchisor of a franchise located in the​ 3.18 state, but does not include the franchisee operating the franchise. Producer does not include​ 3.19 an entity exempted from the program under section 115A.1423, paragraph (h).​ 3.20 (t) "Product stewardship organization" means the not-for-profit entity contracted by the​ 3.21 commissioner and authorized to collect and distribute producer fees.​ 3.22 (u) "Product stewardship program" or "program" means the program implemented under​ 3.23 sections 115A.1421 to 115A.1443 by the product stewardship organization to assess and​ 3.24 collect fees from producers based on the amount, by weight, of nonreusable packaging sold,​ 3.25 offered for sale, or distributed for sale in or into the state by each producer to pay for:​ 3.26 (1) investments in product redesign and reusable systems;​ 3.27 (2) fees to municipalities and political subdivisions;​ 3.28 (3) certain recycling and waste management programs; and​ 3.29 (4) investments in reuse and recycling education and infrastructure.​ 3.30 (v) "Readily recyclable" means packaging material for which the commissioner​ 3.31 determines that entities that process recyclable material generated in the state:​ 3​Section 1.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 4.1 (1) can sort the material; and​ 4.2 (2) are willing to purchase the material in full bales when fully sorted in quantities equal​ 4.3 to or in excess of its supply, based on data from the previous two calendar years.​ 4.4 Readily recyclable does not include packaging material that contains a toxic substance.​ 4.5 (w) "Recycling" has the meaning given in section 115A.03, subdivision 25b.​ 4.6 (x) "Returnable" means that packaging can be conveniently returned after use to a reuse​ 4.7 or return system with an average annual return rate of no less than 80 percent.​ 4.8 (y) "Reusable" means a product that is:​ 4.9 (1) designed to be used repeatedly and is returnable for a number of use cycles that​ 4.10 exceeds those specified in section 115A.1435;​ 4.11 (2) free of toxic substances;​ 4.12 (3) safe for washing and sanitizing according to applicable food safety laws; and​ 4.13 (4) capable of being recycled at the end of use, with the exception of ceramic products.​ 4.14 (z) "Toxic substance" means a chemical or class of related chemicals listed in section​ 4.15 115A.1437 or a chemical designated as a chemical of high concern by the Department of​ 4.16 Health under section 116.9402.​ 4.17 (aa) "Unit" means each discrete component of a package or container, including material​ 4.18 that is used for containing, protecting, handling, delivering, transporting, distributing, and​ 4.19 presenting a product that is sold, offered for sale, imported, or distributed in the state,​ 4.20 including through Internet transactions.​ 4.21 (bb) "Universal product code" or "UPC" means a standard for encoding a set of lines​ 4.22 and spaces that can be scanned and interpreted into numbers for product identification​ 4.23 purposes. Universal product code includes any industry-accepted barcode used for product​ 4.24 identification purposes in a manner similar to a UPC, including but not limited to an EAN.​ 4.25 EFFECTIVE DATE. This section is effective the day following final enactment.​ 4.26 Sec. 2. [115A.1422] PRODUCT STEWARDSHIP PROGRAM.​ 4.27 (a) Sections 115A.1421 to 115A.1443 establish a product stewardship program by which​ 4.28 producers of packaging material that participate in a product stewardship organization must​ 4.29 make changes to their products' design to reduce packaging consumption and waste and​ 4.30 must pay fees based on the weight and type of packaging material sold, offered for sale, or​ 4.31 distributed for sale in or into the state.​ 4​Sec. 2.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 5.1 (b) The product stewardship organization must assess and collect fees from producers​ 5.2 and establish and manage the packaging responsibility account under section 115A.1430​ 5.3 to be used to award grants to eligible projects that reduce packaging waste by investing in​ 5.4 reuse and refill systems; recycling infrastructure; and reuse, refill, and recycling education​ 5.5 in the state.​ 5.6 (c) The commissioner must conduct a statewide needs assessment to determine the​ 5.7 barriers and opportunities to reduce packaging waste and increase waste reduction, reuse,​ 5.8 and recycling.​ 5.9 EFFECTIVE DATE. This section is effective the day following final enactment.​ 5.10 Sec. 3. [115A.1423] PRODUCER RESPONSIBILITIES; EXEMPTIONS.​ 5.11 (a) Beginning two years after the effective date of this section, a producer may not sell,​ 5.12 offer for sale, or distribute for sale in or into the state a product contained, protected,​ 5.13 delivered, presented, or distributed in or using packaging material unless the producer​ 5.14 complies with all applicable requirements of this section.​ 5.15 (b) Notwithstanding a producer's failure to comply with all applicable requirements of​ 5.16 this section with respect to a type or types of packaging material, the commissioner may​ 5.17 authorize the sale or distribution for sale in or into the state of another product or products​ 5.18 of the producer that are contained, protected, delivered, presented, or distributed in or using​ 5.19 a different type or types of packaging material for which that producer complies with all​ 5.20 applicable requirements of this section.​ 5.21 (c) A producer must annually report to the product stewardship organization:​ 5.22 (1) the total amount of packaging material, by weight, sold, offered for sale, or distributed​ 5.23 for sale in or into the state by the producer in the previous calendar year;​ 5.24 (2) the total amount of packaging material, by unit, sold, offered for sale, or distributed​ 5.25 for sale in or into the state by the producer in the previous calendar year;​ 5.26 (3) the percentage of all packaging material the producer sold, offered for sale, or​ 5.27 distributed for sale into the state through Internet transactions; and​ 5.28 (4) all information necessary for the product stewardship organization to meet its​ 5.29 obligations under section 115A.1426.​ 5.30 (d) A producer must annually report to the commissioner information necessary for the​ 5.31 commissioner to make a determination of the producer's compliance with:​ 5.32 (1) the nonreusable packaging reduction requirements of section 115A.1434;​ 5​Sec. 3.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 6.1 (2) the reuse system requirements of section 115A.1435;​ 6.2 (3) the recycling or postconsumer recycled material requirements of section 115A.1436;​ 6.3 (4) the toxic substances in packaging requirements of section 115A.1437; and​ 6.4 (5) the labeling requirements of section 115A.1441.​ 6.5 (e) A producer that is not a low-volume producer must describe the methods used to​ 6.6 determine the amount reported under this section for each type of packaging material​ 6.7 associated with the producer's products, a description of the characteristics of each type of​ 6.8 packaging material, and a list of the producer's brands and the UPCs of the products​ 6.9 associated with each type of packaging material.​ 6.10 (f) A producer that is unable to fully satisfy the reporting requirements of this section​ 6.11 because of failure to obtain sufficient information regarding the characteristics of the​ 6.12 packaging associated with the producer's products sold, offered for sale, or distributed for​ 6.13 sale in or into the state may alternatively report an estimate of the total amount of that​ 6.14 packaging based on unit quantities and a description of methods used to calculate the​ 6.15 estimate.​ 6.16 (g) A producer must pay fees established by the commissioner under section 115A.1428​ 6.17 to the product stewardship organization.​ 6.18 (h) Notwithstanding any provision of this section to the contrary, a producer is exempt​ 6.19 from sections 115A.1421 to 115A.1443 in any calendar year in which:​ 6.20 (1) the producer received less than $2,000,000 in total gross revenue during the previous​ 6.21 calendar year; or​ 6.22 (2) the producer sold, offered for sale, or distributed for sale in or into the state during​ 6.23 the previous calendar year products contained, protected, delivered, presented, or distributed​ 6.24 in or using less than one ton of packaging material in total.​ 6.25 (i) Within 30 days of receiving a request from the commissioner, a producer claiming​ 6.26 an exemption under this section must provide to the commissioner sufficient information​ 6.27 to demonstrate that the producer meets the requirements for an exemption under paragraph​ 6.28 (h).​ 6.29 EFFECTIVE DATE. This section is effective the day following final enactment.​ 6​Sec. 3.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 7.1 Sec. 4. [115A.1424] PRODUCT STEWARDSHIP ORGANIZATION; SELECTION.​ 7.2 (a) Consistent with the requirements of this section, the commissioner must select and​ 7.3 enter into a contract with one product stewardship organization to operate a product​ 7.4 stewardship program.​ 7.5 (b) Consistent with applicable competitive bidding requirements under state purchasing​ 7.6 laws, the commissioner must issue a request for proposals for operating a product stewardship​ 7.7 program. The proposals must address operation of the program for ten years and must​ 7.8 include, at a minimum:​ 7.9 (1) a description of how the bidder will administer the program, including mechanisms​ 7.10 or processes to assist producers in reporting required information and to share methods by​ 7.11 which packaging material used by a producer may be modified so as to reduce the producer's​ 7.12 fee obligations and comply with the targets for reduction and reuse required in section​ 7.13 115A.1435 and targets for recycling or postconsumer recycled material required in section​ 7.14 115A.1436;​ 7.15 (2) a description of how the bidder intends to solicit and consider input from interested​ 7.16 persons, including but not limited to producers, political subdivisions, environmental​ 7.17 organizations, waste management and recycling establishments, and reuse system operators,​ 7.18 regarding the bidder's operation of the program;​ 7.19 (3) a description of how the bidder intends to establish and manage the packaging​ 7.20 responsibility account;​ 7.21 (4) a financial assurance plan that ensures all funds held in the packaging responsibility​ 7.22 account under section 115A.1430 are immediately and exclusively forfeited and transferred​ 7.23 to or otherwise made immediately available to the commissioner when the product​ 7.24 stewardship organization's contract with the commissioner is terminated by the commissioner​ 7.25 or expires, unless the product stewardship organization enters into a new contract with the​ 7.26 commissioner before the organization's existing contract expires;​ 7.27 (5) a proposed budget outlining the anticipated costs of operating the product stewardship​ 7.28 program, including:​ 7.29 (i) identification of any start-up costs;​ 7.30 (ii) a description of the method by which the bidder intends to determine and collect​ 7.31 producer fees during the initial start-up period of program operations; and​ 7.32 (iii) methods that will be used to reimburse or require additional fees by producers after​ 7.33 the initial start-up period, based on producer reporting of the actual amount of packaging​ 7​Sec. 4.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 8.1 material sold, offered for sale, or distributed for sale in or into the state during the initial​ 8.2 start-up period; and​ 8.3 (6) a certification that the bidder will not share, except with the commissioner, information​ 8.4 provided to the bidder by a producer that is identified by the producer as proprietary​ 8.5 information. The certification must include a description of the methods by which the bidder​ 8.6 intends to ensure the confidentiality of the information.​ 8.7 (c) In accordance with state purchasing laws, the commissioner must enter into one​ 8.8 contract with a bidder that has submitted a proposal that meets the requirements of this​ 8.9 section. The commissioner must select the product stewardship organization within one​ 8.10 year of the date on which the final program rules are adopted.​ 8.11 EFFECTIVE DATE. This section is effective the day following final enactment.​ 8.12 Sec. 5. [115A.1425] PRODUCT STEWARDSHIP ORGANIZATION;​ 8.13 OBLIGATIONS.​ 8.14 (a) The product stewardship organization must:​ 8.15 (1) collect and compile data from producers according to section 115A.1426;​ 8.16 (2) collect fees due from producers according to section 115A.1428;​ 8.17 (3) use fees collected from producers to fund the needs assessment required in section​ 8.18 115A.1429;​ 8.19 (4) distribute funds from the packaging responsibility account according to section​ 8.20 115A.1430;​ 8.21 (5) offer technical support to producers;​ 8.22 (6) fund third-party, independent audits of inbound and outbound recyclable material​ 8.23 generated in the state and disposal of inbound and outbound materials and litter audits that​ 8.24 are conducted at least annually; and​ 8.25 (7) comply with rules adopted to implement sections 115A.1421 to 115A.1443.​ 8.26 (b) A product stewardship organization may not make campaign contributions, lobby,​ 8.27 or bring administrative or court actions against the commissioner, any third-party inspectors,​ 8.28 or any other party in connection with the program.​ 8.29 EFFECTIVE DATE. This section is effective the day following final enactment.​ 8​Sec. 5.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 9.1 Sec. 6. [115A.1426] PRODUCT STEWARDSHIP ORGANIZATION; REPORTING​ 9.2 REQUIREMENTS.​ 9.3 A product stewardship organization must annually submit to the commissioner and make​ 9.4 available on its publicly accessible website a report that includes, at a minimum, the following​ 9.5 information for the previous calendar year:​ 9.6 (1) contact information for the product stewardship organization;​ 9.7 (2) a list of participating producers and the brands and the UPCs of products associated​ 9.8 with each producer;​ 9.9 (3) the total amount, by both weight and number of units, of each type of packaging​ 9.10 material sold or offered for sale within the state;​ 9.11 (4) the total amount, by both weight and number of units, of packaging material sold or​ 9.12 offered for sale in the state that is reusable;​ 9.13 (5) a complete accounting of payments made to and by the product stewardship​ 9.14 organization during the previous calendar year;​ 9.15 (6) a list of any producer noncompliance known to the product stewardship organization​ 9.16 and the steps the product stewardship organization is taking to bring noncompliant producers​ 9.17 into compliance;​ 9.18 (7) a description of the infrastructure and education grants made by the product​ 9.19 stewardship organization in previous calendar years and an evaluation of how those grants​ 9.20 increased access to recycling and reuse systems in the state;​ 9.21 (8) an assessment of the progress made toward achieving program goals, including but​ 9.22 not limited to the goals established in sections 115A.1434 to 115A.1436;​ 9.23 (9) an assessment of whether the fee schedule for producers adopted by the commissioner​ 9.24 under section 115A.1428 has been successful in incentivizing improvements to the design​ 9.25 of packaging material, including increases in the percentage of reusable packaging and​ 9.26 decreases in overall quantity of packaging by number of units;​ 9.27 (10) an assessment of whether the investments made under sections 115A.1432 and​ 9.28 115A.1433 have been successful in increasing the amount of packaging material that is​ 9.29 readily recyclable or reusable packaging and in incentivizing improvements to the design​ 9.30 of packaging material;​ 9​Sec. 6.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 10.1 (11) any proposals to change the program or modify investments in education and​ 10.2 infrastructure designed to achieve program goals to reduce the amount of packaging material​ 10.3 used, increase access, or otherwise increase program efficiency;​ 10.4 (12) results of representative inbound and outbound audits of recyclable material​ 10.5 processed and sold by material recycling facilities in the state, waste characterization of​ 10.6 municipal solid waste being disposed of in the state, and litter audits;​ 10.7 (13) results of a third-party financial audit of the product stewardship organization; and​ 10.8 (14) any additional information required by the commissioner.​ 10.9 EFFECTIVE DATE. This section is effective the day following final enactment.​ 10.10 Sec. 7. [115A.1427] COMMISSIONER'S RESPONSIBILITIES.​ 10.11 (a) Within one year of the effective date of this section, the commissioner must adopt​ 10.12 rules under chapter 14 setting fees for producers according to section 115A.1428. Fees must​ 10.13 be set at a rate that will incentivize reductions in overall packaging and the adoption of​ 10.14 reuse systems, increase postconsumer recycled material, and promote using recyclable​ 10.15 packaging.​ 10.16 (b) The commissioner must revise fees:​ 10.17 (1) at least every three years to reflect new data received about material use and​ 10.18 management; or​ 10.19 (2) whenever the targets established in sections 115A.1434 to 115A.1436 are not met.​ 10.20 (c) Within six months of the effective date of this section, the commissioner must conduct​ 10.21 a reduction, reuse, and recycling needs assessment according to section 115A.1429 to​ 10.22 identify barriers and opportunities for reducing, reusing, and recycling packaging.​ 10.23 (d) The commissioner must evaluate the program each year to ensure its proper​ 10.24 functioning and to prevent fraud, waste, or abuse in expending money.​ 10.25 EFFECTIVE DATE. This section is effective the day following final enactment.​ 10.26 Sec. 8. [115A.1428] ASSESSMENT OF FEES.​ 10.27 (a) The commissioner must establish the manner in which producer fees on packaging​ 10.28 materials are calculated. Producer fees must be calculated based on:​ 10.29 (1) the packaging material type; and​ 10​Sec. 8.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 11.1 (2) the quantity of each packaging material type, by weight, that the producer sells, offers​ 11.2 for sale, or distributes in the state.​ 11.3 (b) At a minimum, the commissioner must establish fees on the following packaging​ 11.4 material types:​ 11.5 (1) paper;​ 11.6 (2) cardboard;​ 11.7 (3) corrugated cardboard;​ 11.8 (4) generic paper or cardboard;​ 11.9 (5) wood;​ 11.10 (6) glass;​ 11.11 (7) polypropylene;​ 11.12 (8) polyethylene terephthalate (PET);​ 11.13 (9) high-density polyethylene (HDPE);​ 11.14 (10) expanded polystyrene (EPS);​ 11.15 (11) low-density polyethylene (LDPE);​ 11.16 (12) polystyrene;​ 11.17 (13) bioplastics;​ 11.18 (14) plastic film;​ 11.19 (15) other plastics;​ 11.20 (16) steel or ferrous;​ 11.21 (17) aluminum;​ 11.22 (18) tinplate;​ 11.23 (19) generic metals; and​ 11.24 (20) ceramics.​ 11.25 (c) Fees must reflect:​ 11.26 (1) the net cost of curbside collection, commercial collection, or transfer station operation;​ 11.27 (2) on-site processing costs for each readily recyclable packaging material type;​ 11.28 (3) management cost of nonreadily recyclable packaging;​ 11​Sec. 8.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 12.1 (4) transportation cost for each packaging material type;​ 12.2 (5) the commissioner's cost to administer sections 115A.1421 to 115A.1443;​ 12.3 (6) the product stewardship organization's administrative costs; and​ 12.4 (7) any other program costs determined by the commissioner.​ 12.5 (d) Fees for each type of packaging must be structured to promote environmentally​ 12.6 beneficial packaging design. Fees must be higher for packaging material that is not readily​ 12.7 recyclable than for packaging material that is readily recyclable. No fee may be established​ 12.8 on packaging that is reusable.​ 12.9 (e) The fee schedule adopted under this section must provide for a flat fee option to be​ 12.10 assessed on a tiered basis so that a low-volume producer pays no more than $500 per ton​ 12.11 of packaging and no more than $7,500 in total annual fees.​ 12.12 EFFECTIVE DATE. This section is effective the day following final enactment.​ 12.13 Sec. 9. [115A.1429] STATEWIDE REDUCTION, REUSE, AND RECYCLING​ 12.14 NEEDS ASSESSMENT.​ 12.15 (a) Within six months of the effective date of this section, the commissioner must conduct​ 12.16 a statewide needs assessment to identify barriers and opportunities for reducing, reusing,​ 12.17 and recycling packaging.​ 12.18 (b) The commissioner must issue a request for proposals to conduct the needs assessment.​ 12.19 The proposals must include, at a minimum, a description of how the bidder will conduct a​ 12.20 statewide needs assessment that, at a minimum, includes an evaluation of:​ 12.21 (1) current barriers affecting the establishment of reduction and reuse programs;​ 12.22 (2) opportunities to establish reduction and reuse programs;​ 12.23 (3) current needs affecting recycling access and availability;​ 12.24 (4) opportunities to improve access to recycling;​ 12.25 (5) the capacity, cost, and needs associated with collecting and transporting recyclable​ 12.26 material;​ 12.27 (6) the processing capacity, market conditions, and opportunities in the state and​ 12.28 regionally for recyclable material;​ 12.29 (7) barriers to the marketability of recyclable materials generated in the state and potential​ 12.30 solutions;​ 12​Sec. 9.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 13.1 (8) the amount, by weight, of material that is recycled by each material recovery facility​ 13.2 that accepts packaging material from the state;​ 13.3 (9) consumer education needs with respect to reuse systems, recycling, and reducing​ 13.4 contamination in collected recyclable material;​ 13.5 (10) the following costs:​ 13.6 (i) net cost of curbside collection, commercial collection, or transfer station operation;​ 13.7 (ii) on-site processing cost for each readily recyclable packaging material type;​ 13.8 (iii) management cost of nonreadily recyclable packaging;​ 13.9 (iv) transportation cost for each packaging material type; and​ 13.10 (v) any other program costs determined by the commissioner;​ 13.11 (11) the availability of employment opportunities in recycling and reuse systems for​ 13.12 women and minorities;​ 13.13 (12) the sufficiency and implementation of local government requirements related to​ 13.14 multifamily housing recycling services; and​ 13.15 (13) the location of landfills, incinerators, and transfer stations within the state, the​ 13.16 socioeconomic conditions surrounding the sites, and the permitted pollution levels at each​ 13.17 facility.​ 13.18 (c) The commissioner must update and revise the needs assessment every three years,​ 13.19 using money from the packaging responsibility account established in section 115A.1430.​ 13.20 (d) Within 18 months after the effective date of this section, the commissioner must​ 13.21 submit a report on the results of the needs assessment to the chairs and ranking minority​ 13.22 members of the senate and house of representatives committees with primary jurisdiction​ 13.23 over environment policy and finance.​ 13.24 EFFECTIVE DATE. This section is effective the day following final enactment.​ 13.25 Sec. 10. [115A.1430] PACKAGING RESPONSIBILITY ACCOUNT ESTABLISHED;​ 13.26 AUTHORIZED EXPENDITURES.​ 13.27 (a) The product stewardship organization must establish and manage a packaging​ 13.28 responsibility account according to this section. The product stewardship organization must​ 13.29 deposit into the account all fees received from producers.​ 13​Sec. 10.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 14.1 (b) Beginning one year after the first payment of fees by producers, and annually​ 14.2 thereafter, the product stewardship organization must reimburse the commissioner from the​ 14.3 packaging responsibility account for the commissioner's costs associated with administering​ 14.4 sections 115A.1421 to 115A.1443, including:​ 14.5 (1) costs associated with performing, revising, and updating the needs assessment, as​ 14.6 required under section 115A.1429; and​ 14.7 (2) costs incurred by the commissioner in adopting rules and in administering and​ 14.8 enforcing sections 115A.1421 to 115A.1443 before the effective date of the contract entered​ 14.9 into by the commissioner and the product stewardship organization.​ 14.10 (c) Beginning one year after the first payment of fees by producers, and annually​ 14.11 thereafter, the product stewardship organization must retain a portion of the money in the​ 14.12 packaging responsibility account to pay the costs associated with its administration of the​ 14.13 product stewardship organization, as provided under section 115A.1431. Reimbursement​ 14.14 may include costs associated with the formation of the product stewardship organization.​ 14.15 (d) Beginning one year after the first payment of fees by producers, and annually​ 14.16 thereafter, the product stewardship organization must distribute all revenues in the packaging​ 14.17 responsibility account remaining after the reimbursements under paragraphs (b) and (c) and​ 14.18 in section 115A.1431, paragraph (b), in the following proportions and for the following​ 14.19 purposes:​ 14.20 (1) 50 percent of the money must be used for recycling infrastructure and education​ 14.21 grants, according to section 115A.1432;​ 14.22 (2) 25 percent of the money must be used for reuse infrastructure and education grants,​ 14.23 according to section 115A.1432; and​ 14.24 (3) 25 percent of the money must be distributed to political subdivisions and Minnesota​ 14.25 Tribal governments to address recycling needs in those communities according to section​ 14.26 115A.1433.​ 14.27 EFFECTIVE DATE. This section is effective the day following final enactment.​ 14.28 Sec. 11. [115A.1431] ADMINISTRATIVE EXPENSES.​ 14.29 (a) Beginning one year after the first payment of fees by producers, and annually​ 14.30 thereafter, the product stewardship organization must reimburse the commissioner from the​ 14.31 packaging responsibility account for all costs incurred in administering sections 115A.1421​ 14.32 to 115A.1443, including but not limited to:​ 14​Sec. 11.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 15.1 (1) administration of the agency's contract with any third-party certifier;​ 15.2 (2) costs incurred by the commissioner in managing the agency's contract with the​ 15.3 product stewardship organization;​ 15.4 (3) costs incurred during rulemaking;​ 15.5 (4) costs incurred reviewing grant proposals under sections 115A.1432 and 115A.1433;​ 15.6 and​ 15.7 (5) costs incurred in reviewing compliance information from the product stewardship​ 15.8 organization and individual producers.​ 15.9 (b) Beginning one year after the first payment of fees by producers, and annually​ 15.10 thereafter, the product stewardship organization must retain money in the packaging​ 15.11 responsibility account sufficient to pay the cost of administering the product stewardship​ 15.12 program, which cost must be annually verified by a third-party financial audit paid for by​ 15.13 the product stewardship organization as required in section 115A.1426, clause (13).​ 15.14 EFFECTIVE DATE. This section is effective the day following final enactment.​ 15.15 Sec. 12. [115A.1432] GRANTS FOR RECYCLING AND REUSE​ 15.16 INFRASTRUCTURE AND EDUCATION.​ 15.17 (a) Any interested person, municipality, business, organization, or institution may apply​ 15.18 to the product stewardship organization for a grant to carry out a project or projects to​ 15.19 improve recycling or reuse infrastructure or provide educational programming or materials​ 15.20 regarding recycling or reuse.​ 15.21 (b) A project is eligible to receive a grant under this section only if it fulfills needs​ 15.22 identified in the needs assessment conducted under section 115A.1429 and assists producers​ 15.23 to meet the requirements of section 115A.1435 or 115A.1436.​ 15.24 (c) Reuse grants may be used to invest in collection systems, washing systems, and​ 15.25 technology for tracking and data collection and to make capital expenditures on new and​ 15.26 emerging recycling technology, equipment, or facilities.​ 15.27 (d) A grant awarded for reuse infrastructure or education must meet at least one of the​ 15.28 following goals:​ 15.29 (1) increase transition of the packaging material from nonreusable to reusable;​ 15.30 (2) increase access to reuse infrastructure in the state;​ 15.31 (3) promote the circular economy;​ 15​Sec. 12.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 16.1 (4) develop reuse instructions that are, to the extent practicable, consistent statewide,​ 16.2 easy to understand, and easily accessible; and​ 16.3 (5) develop, in consultation with local governments and other stakeholders, reuse outreach​ 16.4 and education programs and materials that are coordinated across regions of the state.​ 16.5 (e) The commissioner must review all grants proposed to be awarded by the product​ 16.6 stewardship organization under this section. No grant may be awarded under this section​ 16.7 that has not been approved by the commissioner.​ 16.8 (f) The commissioner must approve or deny a grant award proposed by the product​ 16.9 stewardship organization within 90 days of receiving a request for review from the product​ 16.10 stewardship organization.​ 16.11 EFFECTIVE DATE. This section is effective the day following final enactment.​ 16.12 Sec. 13. [115A.1433] GRANTS TO POLITICAL SUBDIVISIONS AND MINNESOTA​ 16.13 TRIBAL GOVERNMENTS.​ 16.14 (a) The commissioner must adopt rules specifying the manner in which the product​ 16.15 stewardship organization must provide funding to political subdivisions and Minnesota​ 16.16 Tribal governments to address recycling needs, as determined by the needs assessment​ 16.17 under section 115A.1429.​ 16.18 (b) Political subdivisions and Minnesota Tribal governments are eligible to receive​ 16.19 funding only if they provide recycling services to all residents or members within their​ 16.20 jurisdictional control.​ 16.21 (c) Two or more political subdivisions or Minnesota Tribal governments that provide​ 16.22 recycling services may elect to jointly receive funding, provided that they demonstrate that​ 16.23 their recycling services are interconnected.​ 16.24 EFFECTIVE DATE. This section is effective the day following final enactment.​ 16.25 Sec. 14. [115A.1434] NONREUSABLE PACKAGING REDUCTION​ 16.26 REQUIREMENTS.​ 16.27 (a) A producer must reduce the total amount of nonreusable packaging by unit, on average​ 16.28 and in the aggregate, across its brand according to the following schedule, measured by the​ 16.29 length of time following the selection of the product stewardship organization under section​ 16.30 115A.1424:​ 16.31 (1) by ten percent, two years after;​ 16​Sec. 14.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 17.1 (2) by 20 percent, four years after;​ 17.2 (3) by 30 percent, six years after;​ 17.3 (4) by 40 percent, eight years after; and​ 17.4 (5) by 50 percent, ten years after.​ 17.5 (b) The reductions required in paragraph (a) must be measured against the total amount​ 17.6 of packaging the producer sold, offered for sale, or distributed for sale in the state during​ 17.7 the calendar year in which this section became effective. For producers that did not sell,​ 17.8 offer for sale, or distribute for sale any packaging during the calendar year in which this​ 17.9 section became effective, the reductions required in paragraph (a) must be measured against​ 17.10 the first calendar year for which there is data on the amount of packaging the producer sold,​ 17.11 offered for sale, or distributed for sale in the state.​ 17.12 (c) The reductions required in this section may be achieved by eliminating nonreusable​ 17.13 packaging or by transitioning to a reuse model.​ 17.14 (d) A producer must report its compliance with the requirements of the applicable clause​ 17.15 of paragraph (a) to the commissioner.​ 17.16 EFFECTIVE DATE. This section is effective the day following final enactment.​ 17.17 Sec. 15. [115A.1435] CRITERIA FOR NUMBER OF USES IN REUSE SYSTEMS.​ 17.18 The commissioner must adopt rules that specify the minimum number of reuse cycles​ 17.19 required for each type of packaging material to be considered reusable, including but not​ 17.20 limited to:​ 17.21 (1) cups: a minimum of 125 uses;​ 17.22 (2) clamshells: a minimum of 50 uses;​ 17.23 (3) plates: a minimum of 63 uses; and​ 17.24 (4) glass bottles: a minimum of 20 uses.​ 17.25 EFFECTIVE DATE. This section is effective the day following final enactment.​ 17.26 Sec. 16. [115A.1436] RECYCLING OR POSTCONSUMER RECYCLED​ 17.27 MATERIAL; REQUIREMENTS.​ 17.28 (a) Each producer must ensure that all nonreusable packaging across its brand:​ 17.29 (1) is recycled at a rate of, at a minimum:​ 17​Sec. 16.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 18.1 (i) 50 percent, five years after the selection of the product stewardship organization;​ 18.2 (ii) 80 percent, eight years after the selection of the product stewardship organization;​ 18.3 and​ 18.4 (iii) 90 percent, 12 years after the selection of the product stewardship organization; or​ 18.5 (2) incorporates, on average and in the aggregate, the following amount, by weight, of​ 18.6 postconsumer recycled material:​ 18.7 (i) 50 percent, five years after the selection of the product stewardship organization;​ 18.8 (ii) 80 percent, five years after the selection of the product stewardship organization;​ 18.9 and​ 18.10 (iii) 90 percent, 12 years after the selection of the product stewardship organization.​ 18.11 (b) In determining a producer's compliance with this section, a producer must rely on​ 18.12 the state data regarding packaging sales and material use, if available, or may alternatively​ 18.13 rely on the same type of data applicable to a region or territory of the United States that​ 18.14 includes the state.​ 18.15 (c) If a producer elects to rely on data regarding packaging sales and materials used​ 18.16 derived from data applicable to a region or territory of the United States that includes the​ 18.17 state, the producer must:​ 18.18 (1) prorate the regional or territorial data to estimate the state-specific figures based on​ 18.19 market share or population in a manner that ensures that the percentage of postconsumer​ 18.20 recycled material calculated for beverage containers sold in the state is the same percentage​ 18.21 as calculated for the larger region or territory; and​ 18.22 (2) document the methodology used to estimate the state-specific figures calculated​ 18.23 under clause (1).​ 18.24 (d) The commissioner may assess an administrative penalty under section 116.072 against​ 18.25 a producer that fails to comply with this section, calculated as follows:​ 18.26 (1) the commissioner must add the total amount by weight in pounds of postconsumer​ 18.27 recycled material and the total amount by weight in pounds of material that is not​ 18.28 postconsumer recycled material used by the producer in all the packaging the producer sold,​ 18.29 offered for sale, or distributed for sale in the state during the previous calendar year. Unless​ 18.30 otherwise determined by the commissioner, the figure calculated under this clause must be​ 18.31 calculated using the information reported by the manufacturer under paragraph (b);​ 18​Sec. 16.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 19.1 (2) the commissioner must multiply the figure calculated under clause (1) by the​ 19.2 applicable minimum postconsumer recycled material percentage required under paragraph​ 19.3 (a), clause (2), during the previous calendar year;​ 19.4 (3) the commissioner must subtract from the figure calculated under clause (2) the total​ 19.5 amount by weight in pounds of postconsumer recycled material used by the producer in all​ 19.6 products the producer sold, offered for sale, or distributed for sale in packaging in the state​ 19.7 during the previous calendar years; and​ 19.8 (4) the commissioner must multiply that figure calculated under clause (3) by $0.20. If​ 19.9 the figure calculated under this clause is less than or equal to zero, the commissioner may​ 19.10 not assess an administrative penalty.​ 19.11 EFFECTIVE DATE. This section is effective the day following final enactment.​ 19.12 Sec. 17. [115A.1437] TOXIC SUBSTANCES IN PACKAGING.​ 19.13 (a) Beginning one year after the effective date of this section, no person may manufacture,​ 19.14 knowingly sell, offer for sale, distribute for sale, or distribute for use in the state packaging​ 19.15 or reusable products containing any of the following toxic substances above the practical​ 19.16 quantification limit:​ 19.17 (1) ortho-phthalates;​ 19.18 (2) bisphenols;​ 19.19 (3) perfluoroalkyl and polyfluoroalkyl substances (PFAS);​ 19.20 (4) lead and lead compounds;​ 19.21 (5) hexavalent chromium and compounds;​ 19.22 (6) cadmium and cadmium compounds;​ 19.23 (7) mercury and mercury compounds;​ 19.24 (8) benzophenone and its derivatives;​ 19.25 (9) halogenated flame retardants;​ 19.26 (10) perchlorate;​ 19.27 (11) formaldehyde; and​ 19.28 (12) toluene.​ 19​Sec. 17.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 20.1 (b) Beginning one year after the effective date of this section, no person may manufacture,​ 20.2 knowingly sell, offer for sale, distribute for sale, or distribute for use in the state packaging​ 20.3 or reusable products containing:​ 20.4 (1) polyvinyl chloride;​ 20.5 (2) polystyrene; or​ 20.6 (3) polycarbonate.​ 20.7 (c) Beginning three years after the effective date of this section and every three years​ 20.8 thereafter, the commissioner must, in collaboration with the Department of Health, designate​ 20.9 at least ten but no more than 20 toxic substances in packaging, unless the commissioner​ 20.10 determines that fewer than ten chemicals meet the definition of toxic substances. If the​ 20.11 commissioner determines that fewer than ten toxic substances meet the definition, the​ 20.12 commissioner must publish a detailed statement of findings and conclusions supporting the​ 20.13 determination.​ 20.14 (d) Within 180 days of designating a toxic substance under paragraph (a), the​ 20.15 commissioner must adopt rules to prohibit the newly designated toxic substance in packaging,​ 20.16 with an effective date no later than two years after the rules are adopted.​ 20.17 (e) Beginning three years after the effective date of this section, a person may petition​ 20.18 the commissioner to add a chemical or chemical class to the list of toxic substances in​ 20.19 packaging. A petition must contain information that supports designating the chemical or​ 20.20 chemical class as a toxic substance in packaging. Within 90 days of receiving a petition,​ 20.21 the commissioner must either grant or deny the petition and publish a written explanation​ 20.22 of the reasons for the decision. If the commissioner grants the petition in whole or part, the​ 20.23 commissioner must designate the chemical or chemical class as a toxic substance in​ 20.24 packaging and adopt rules within 180 days to prohibit the newly designated chemicals in​ 20.25 packaging, with an effective date no later than two years after the rules are adopted.​ 20.26 (f) A producer that violates this section is subject to penalties according to the​ 20.27 commissioner's rules. Notwithstanding any law to the contrary, any producer, distributor,​ 20.28 retailer, or other responsible party that violates this section is subject to a fine for each​ 20.29 violation and for each day that the violation occurs in an amount of not more than $200,000.​ 20.30 EFFECTIVE DATE. This section is effective the day following final enactment.​ 20​Sec. 17.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 21.1 Sec. 18. [115A.1438] ANNUAL PRODUCT STEWARDSHIP PROGRAM REPORT.​ 21.2 (a) Beginning one year after the product stewardship organization begins to collect fees​ 21.3 from producers, and on an annual basis thereafter, the commissioner, with the assistance of​ 21.4 the product stewardship organization, must submit a product stewardship program report​ 21.5 to the chairs and ranking minority members of the senate and house of representatives​ 21.6 committees with jurisdiction over environment policy and finance.​ 21.7 (b) The report must include, at a minimum:​ 21.8 (1) a list of all participating producers and the brands of products associated with each​ 21.9 producer;​ 21.10 (2) the number of units of packaging and type of packaging products, both nonreusable​ 21.11 and reusable, that were sold, offered for sale, or distributed in the state;​ 21.12 (3) a list of all packaging materials that are readily recyclable in the state;​ 21.13 (4) results of an audit of inbound and outbound readily recyclable packaging material​ 21.14 processed and sold within the state;​ 21.15 (5) a waste characterization study that specifies the quantity in tons of packaging material​ 21.16 in the waste stream, according to types of uses;​ 21.17 (6) a statewide litter survey that identifies the quantity of packaging material in litter​ 21.18 according to types of packaging material and the brands that produce the material;​ 21.19 (7) a list of the amount of packaging material, by packaging material type, sold or offered​ 21.20 for sale in the state that year;​ 21.21 (8) a description of grant awards made under section 115A.1432;​ 21.22 (9) the compliance of producers with the toxic substances ban under section 115A.1437;​ 21.23 and​ 21.24 (10) an assessment of program performance.​ 21.25 EFFECTIVE DATE. This section is effective the day following final enactment.​ 21.26 Sec. 19. [115A.1439] PRODUCER COMPLIANCE INFORMATION.​ 21.27 The product stewardship organization must provide the commissioner with a regularly​ 21.28 updated list of producers that are participating in the program and a list of UPCs of products​ 21.29 for which each producer has complied with the program's requirements and, if known to​ 21.30 the product stewardship organization, a list of producers that are not participating in the​ 21​Sec. 19.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 22.1 program and are not compliant with the program's requirements. The commissioner must​ 22.2 post the information under this section on the agency website.​ 22.3 EFFECTIVE DATE. This section is effective the day following final enactment.​ 22.4 Sec. 20. [115A.1440] ENFORCEMENT.​ 22.5 (a) The commissioner must enforce sections 115A.1421 to 115A.1443 under sections​ 22.6 115.071 and 116.072. The commissioner may request a certificate of compliance from a​ 22.7 producer that attests that a producer's products meet the requirements of sections 115A.1421​ 22.8 to 115A.1443 and is signed by an authorized official of the producer. The commissioner​ 22.9 must post any certificate of compliance on the agency website for public access.​ 22.10 (b) The commissioner may bring a civil action to enjoin the sale, distribution, or​ 22.11 importation into the state of a packaging material in violation of sections 115A.1421 to​ 22.12 115A.1443.​ 22.13 (c) The penalties provided for in this section may be recovered in a civil action brought​ 22.14 by the attorney general.​ 22.15 EFFECTIVE DATE. This section is effective the day following final enactment.​ 22.16 Sec. 21. [115A.1441] LABELING.​ 22.17 (a) A producer must affix a label to all packaging material sold, offered for sale, or​ 22.18 distributed for sale in or into the state containing information from one of the following​ 22.19 clauses, in a format approved by the commissioner:​ 22.20 (1) the percentage of postconsumer recycled material in the packaging material;​ 22.21 (2) whether the packaging material is readily recyclable and how to recycle it; or​ 22.22 (3) whether the packaging material is compostable.​ 22.23 (b) All packaging material sold in the state must conform with the uniform labeling​ 22.24 system required by this section. Packaging that does not meet the requirements of this section​ 22.25 may not be sold, offered for sale, or distributed for sale in the state beginning two years​ 22.26 after the effective date of this section.​ 22.27 EFFECTIVE DATE. This section is effective the day following final enactment.​ 22.28 Sec. 22. [115A.1442] ANTICOMPETITIVE CONDUCT.​ 22.29 (a) A producer that organizes collection or recycling under sections 115A.1421 to​ 22.30 115A.1443 is authorized to engage in anticompetitive conduct to the extent necessary to​ 22​Sec. 22.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​ 23.1 plan and implement its chosen organized collection or recycling system and is immune from​ 23.2 liability under state laws relating to antitrust, restraint of trade, unfair trade practices, and​ 23.3 other regulation of trade or commerce.​ 23.4 (b) An organization of producers, an individual producer, and a producer's officers,​ 23.5 members, employees, and agents who cooperate with a political subdivision that organizes​ 23.6 collection or recycling under sections 115A.1421 to 115A.1443 are authorized to engage​ 23.7 in anticompetitive conduct to the extent necessary to plan and implement the organized​ 23.8 collection or recycling system, provided that the political subdivision actively supervises​ 23.9 the participation of each entity. An organization, entity, or person covered by this paragraph​ 23.10 is immune from liability under state law relating to antitrust, restraint of trade, unfair trade​ 23.11 practices, and other regulation of trade or commerce.​ 23.12 EFFECTIVE DATE. This section is effective the day following final enactment.​ 23.13 Sec. 23. [115A.1443] RULEMAKING.​ 23.14 The commissioner must, no later than one year after the effective date of this section,​ 23.15 adopt rules according to chapter 14 necessary to implement, administer, and enforce sections​ 23.16 115A.1421 to 115A.1443 .​ 23.17 EFFECTIVE DATE. This section is effective the day following final enactment.​ 23​Sec. 23.​ 22-06739 as introduced​03/07/22 REVISOR CKM/NG​