85R2586 JRR-F

By: Anderson of Dallas H.B. No. 1874

A BILL TO BE ENTITLED

AN ACT

relating to a program for the recycling of certain household batteries; authorizing a fee; providing civil and administrative penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 361, Health and Safety Code, is amended by adding Subchapter P to read as follows:

SUBCHAPTER P. HOUSEHOLD BATTERY RECYCLING PROGRAM

Sec. 361.471. DEFINITIONS. In this subchapter:

(1) "Brand" means a name, symbol, word, or traceable mark that identifies a covered battery and attributes the covered battery to the owner or licensee of the brand as the producer.

(2) "Covered battery" means a battery or battery-containing product described by Section 361.472(a).

(3) "Discarded covered battery" means a covered battery that a user discarded or intends to discard, abandon, or send for recycling.

(4) "Producer" means one of the following with regard to a covered battery that is sold or offered for sale in this state:

(A) a person that manufactures a covered battery and sells or offers for sale that covered battery in this state under the person's own name or brand;

(B) a person other than a person described by Paragraph (A) that owns or licenses a trademark or brand under which a covered battery is sold or offered for sale whether or not the trademark is registered; or

(C) a person other than a person described by Paragraph (A) or (B), including a wholesaler or retailer, that imports a covered battery into this state for sale.

(5) "Recycling" means any process in which discarded covered batteries, components, and by-products are transformed into new usable or marketable materials in a manner in which the original products may lose their identity. The term does not include the use of incineration for energy recovery.

(6) "Retailer" means a person that offers covered batteries for sale at retail in this state through any means, including remote offerings such as sales outlets, catalogs, or an Internet website.

(7) "Stewardship organization" means an organization appointed by two or more producers to act as an agent on behalf of the producers to design, submit, implement, and administer a stewardship program under this subchapter.

(8) "Stewardship program" means a program described by Section 361.475.

(9) "Wholesaler" means a person that offers for sale in this state, other than a retail sale, covered batteries intended for retail sale.

Sec. 361.472. APPLICABILITY. (a) This subchapter applies to:

(1) a non-rechargeable battery with a battery size of 4.5-volt, 9-volt, D, C, AA, AAA, AAAA, or A23;

(2) a product that contains or is packed with a battery described by Subdivision (1);

(3) a battery that:

(A) is one or more voltaic or galvanic cells electrically connected to produce electric energy and designed to be recharged and that weighs less than five kilograms; or

(B) is a battery pack designed to be recharged, that weighs less than five kilograms, and that is designed to provide less than 40 volts direct current; and

(4) a product that contains or is packed with a battery described by Subdivision (3).

(b) This subchapter does not apply to:

(1) a product described by Subsection (a)(2) or (4) from which the battery is not easily removed or is not intended or designed to be removed, other than by the manufacturer;

(2) a medical device that is a device as defined by 21 U.S.C. Section 321(h) or a drug as defined by 21 U.S.C. Section 321(g), if the device or drug or the battery included in the device or drug:

(A) must be treated as infectious waste when the device, drug, or battery is discarded; or

(B) is medically contaminated; or

(3) a battery described by Subsection (a)(3) that:

(A) is not easily removed or is not intended or designed to be removed from a product described by Subsection (a)(4), other than by the manufacturer;

(B) contains electrolyte as a free liquid; or

(C) employs lead-acid technology, unless the battery:

(i) is sealed;

(ii) contains no liquid electrolyte; and

(iii) is intended by its manufacturer to power a handheld device or to provide uninterrupted backup electrical power protection for stationary consumer products or stationary office equipment.

Sec. 361.473. EXEMPTION FOR CERTAIN BATTERY-CONTAINING PRODUCTS. (a) In this section:

(1) "Primary battery" means a battery described by Section 361.472(a)(1) or (3).

(2) "Primary battery-containing product" means a battery-containing product described by Section 361.472(a)(2) or (4).

(b) A person that manufactures, sells, offers for sale, or imports a primary battery-containing product in this state is not considered a producer of a covered battery for purposes of this subchapter if, not later than the 45th day after the date of receipt of a request from the commission or a producer or stewardship organization that is implementing a stewardship program approved by the commission under Section 361.475, the person verifies to the requestor that the person only uses primary batteries supplied by a producer that is:

(1) implementing a stewardship program approved by the commission under Section 361.475; or

(2) a member of a stewardship organization implementing a stewardship program approved by the commission under Section 361.475.

(c) A producer or stewardship organization that is implementing a stewardship program that covers the primary battery contained in a primary battery-containing product of a person that is not considered a producer under Subsection (b) may list the person as a participant in the stewardship program implemented by the producer or stewardship organization, as applicable.

Sec. 361.474. SALES PROHIBITED. (a) A producer of a covered battery may not sell, offer for sale, or deliver to a retailer for subsequent sale a covered battery unless the producer or the stewardship organization in which the producer is participating implements a stewardship program approved by the commission under Section 361.475, provided that a producer of a covered battery may sell, offer for sale, or deliver to a retailer for subsequent sale a covered battery that:

(1) was manufactured before September 1, 2017; or

(2) is delivered, not later than September 1, 2027, under a contract for the purchase of covered batteries that was executed before September 1, 2017.

(b) A retailer or wholesaler may not sell or offer for sale a covered battery unless the producer of the covered battery is implementing a stewardship program approved by the commission under Section 361.475 or is a member of a stewardship organization implementing a stewardship program approved by the commission under Section 361.475, provided that a retailer or wholesaler may sell or offer for sale a covered battery that:

(1) was manufactured before September 1, 2017; or

(2) is delivered, not later than September 1, 2027, to the retailer or wholesaler under a contract for the purchase of covered batteries that was executed before September 1, 2017.

Sec. 361.475. STEWARDSHIP PROGRAM; COMMISSION APPROVAL OF PROGRAM. (a) A producer of a covered battery that sells, offers for sale, or delivers to a retailer for a subsequent sale a covered battery in this state shall, individually or as part of a stewardship organization, implement a stewardship program approved by the commission that:

(1) in each council of government region of this state, provides for the collection of covered batteries from consumers at no cost to consumers; and

(2) prohibits a producer from refusing to collect a covered battery based on the brand or producer of the covered battery.

(b) A stewardship program submitted to the commission for approval must include:

(1) the fee prescribed by the commission under Subsection (e);

(2) a list of all producers participating in the program and the brands of covered batteries subject to the program;

(3) a description of the method that will be used to responsibly manage discarded covered batteries to ensure, to the extent economically and technically feasible, that the components of the discarded covered batteries are recycled or otherwise managed responsibly;

(4) a description of the manner in which the program will use existing covered battery collection points;

(5) an education and outreach program and a description of:

(A) the outreach procedures that will be used to provide notice of the program to businesses, retailers, wholesalers, haulers, local governmental entities, and the public; and

(B) planned public educational activities that, at a minimum, notify the public:

(i) that there is a free collection program for all covered batteries; and

(ii) of the location of collection points and how to access the collection program;

(6) a collection rate performance goal for the brands of covered batteries subject to the program; and

(7) if the program is submitted by a stewardship organization or a producer that does not operate a physical retail location in this state, a description of how the program will provide convenient, free, statewide collection opportunities for discarded covered batteries.

(c) Not later than the 30th day after the date of receipt of a stewardship program by the commission, including a program that is resubmitted under Subsection (d), the commission shall approve or disapprove the program. The commission shall approve the program if the program demonstrates to the commission's satisfaction that the program will comply with the requirements of Subsection (b).

(d) If the commission disapproves a stewardship program, the commission shall notify the producer or stewardship organization in writing of the reasons for disapproval of the program. A producer or organization whose program has been disapproved by the commission must amend and resubmit the program to the commission not later than the 45th day after the date of receipt of the notice of disapproval.

(e) A producer or stewardship organization must pay an application fee in an amount determined by the commission by rule.

(f) The commission shall deposit fees collected under this section to the credit of the covered battery stewardship account.

Sec. 361.476. REPORT. (a) Not later than September 1 of each year, a producer or a stewardship organization shall submit to the commission a report that includes:

(1) a description of the activities carried out under the program during the preceding 12 months;

(2) the weight of covered batteries collected by the producer or the stewardship organization during the preceding 12 months;

(3) the locations for all collection points set up by the covered battery producers covered by the program and contact information for each location;

(4) the manner in which the collected covered batteries were sorted, consolidated, and processed; and

(5) examples and a description of educational materials used to increase collection.

(b) When a producer or stewardship organization submits the report, the producer or organization shall pay an administrative fee in an amount determined by the commission by rule.

(c) The commission shall deposit fees collected under this section to the credit of the covered battery stewardship account.

Sec. 361.477. COVERED BATTERY STEWARDSHIP ACCOUNT. (a) The covered battery stewardship account is an account in the general revenue fund that consists of:

(1) fees collected under Sections 361.475 and 361.476;

(2) administrative penalties collected under Subchapter C, Chapter 7, Water Code, for violations of this subchapter;

(3) civil penalties collected under Subchapter D, Chapter 7, Water Code, for violations of this subchapter; and

(4) interest earned on the money in the account, notwithstanding Section 404.071, Government Code.

(b) Money in the account may be appropriated only to the commission to implement and administer this subchapter.

Sec. 361.478. COMMISSION ORDER. The commission may order a producer or stewardship organization to revise the program and to take other actions necessary to comply with this subchapter.

Sec. 361.479. ENFORCEMENT; DEFENSE. (a) The commission may audit or inspect a producer, stewardship organization, retailer, or wholesaler to ensure compliance with this subchapter and rules adopted under this subchapter.

(b) The commission and the attorney general, as appropriate, shall enforce this subchapter and, except as provided by Subsections (d) and (e), take enforcement action against a producer, stewardship organization, retailer, or wholesaler.

(c) The executive director or the attorney general may institute a suit under Section 7.032, Water Code, to enjoin an activity related to the sale of a covered battery in violation of this subchapter.

(d) The commission shall issue a warning notice to a person on the person's first violation of this subchapter. The person must comply with this subchapter not later than the 60th day after the date the warning notice is issued.

(e) A retailer or wholesaler who receives a warning notice from the commission that the retailer's or wholesaler's inventory violates this subchapter because it includes covered batteries from a producer that is not in compliance with this subchapter must bring the inventory into compliance with this subchapter not later than the 60th day after the date the warning notice is issued.

(f) In an enforcement action brought against a producer or stewardship organization for a violation of this subchapter, it is a defense to the action that the violation occurred as a result of a county or municipal regulation that made it substantially burdensome for the producer or stewardship organization to implement the stewardship program.

(g) An administrative or civil penalty collected under Subchapter C or D, Chapter 7, Water Code, for a violation of this subchapter shall be deposited to the credit of the covered battery stewardship account.

Sec. 361.480. CIVIL ACTION AGAINST PRODUCER WITH NO STEWARDSHIP PROGRAM. (a) Except as provided by Subsection (e), a plaintiff stewardship organization may bring a civil action against a producer described by Subdivision (2) at any time to recover damages described by Subsection (b) if:

(1) the plaintiff is a stewardship organization that:

(A) is a nonprofit organization or an organization exempt from federal income tax under Section 501(a), Internal Revenue Code of 1986; and

(B) during the implementation of a stewardship program approved by the commission under Section 361.475, incurred more than $250,000 in costs collecting and recycling discarded covered batteries in this state during the preceding calendar year; and

(2) the producer from which damages are sought was not implementing a stewardship program approved by the commission under Section 361.475 or a member of a stewardship organization implementing a stewardship program approved by the commission under Section 361.475 during the period the plaintiff incurred damages recoverable under Subsection (b).

(b) A court shall award a plaintiff stewardship organization that prevails in a civil action under this section damages in an amount equal to the sum of:

(1) the plaintiff's total costs of collecting and recycling discarded covered batteries in this state during the period alleged, multiplied by the percentage of discarded covered batteries, by weight, for which the defendant is identifiable as the producer; and

(2) the amount described by Subdivision (1), multiplied by the percentage of discarded covered batteries, by weight, for which the producer cannot be identified.

(c) In addition to an award of damages under Subsection (b), the court shall award a plaintiff stewardship organization that prevails in a civil action under this section:

(1) the plaintiff's litigation costs, including court costs and reasonable expenses such as attorney's fees and expert witness fees; and

(2) exemplary damages in an amount equal to three times the amount awarded under Subsection (b).

(d) For purposes of Subsection (b), the percentage of discarded covered batteries for which the defendant is identifiable as the producer and the percentage of discarded covered batteries for which the producer cannot be identified must be determined by using a sample of not less than 500 pounds of randomly selected discarded covered batteries that were collected in this state by the plaintiff.

(e) A stewardship organization described by Subsection (a)(1) may not commence a civil action under this section unless the stewardship organization gives written notice stating the amount of the claim and the basis for its calculation to each defendant not later than the 60th day before the date the action commences.

(f) A civil action under this section may be brought against one or more defendants.

Sec. 361.481. CIVIL ACTION AGAINST PRODUCER PARTICIPATING IN APPROVED STEWARDSHIP PROGRAM. (a) In this section:

(1) "Allocated share" means the percentage of discarded covered batteries, by weight, identified as being the responsibility of a producer, as determined by data generated from a set of qualifying discarded battery sorts.

(2) "Data generated from a set of qualifying discarded battery sorts" means the data described by Subsection (e).

(3) "Stewardship program sort goal" means the sum of discarded covered batteries, by weight, identified as being the responsibility of all producers participating in a stewardship program implemented by a plaintiff stewardship organization, as determined by data generated from a set of qualifying discarded battery sorts, multiplied by:

(A) 10 percent, if the discarded covered batteries are collected on or after September 1, 2018, but before September 1, 2021;

(B) 15 percent, if the discarded covered batteries are collected on or after September 1, 2021, but before September 1, 2024; or

(C) 20 percent, if the discarded covered batteries are collected on or after September 1, 2024.

(b) A plaintiff stewardship organization may bring a civil action against a producer described by Subdivision (2) to recover damages described by Subsection (c) if:

(1) the plaintiff:

(A) is a stewardship organization described by Section 361.480(a)(1); and

(B) collected during the preceding calendar year a weight of discarded covered batteries in excess of the plaintiff's stewardship program sort goal; and

(2) the producer from which damages are sought was participating in a stewardship program implemented by a stewardship organization other than the plaintiff stewardship organization during the period the plaintiff incurred damages recoverable under Subsection (c).

(c) A court shall award a plaintiff stewardship organization that prevails in a civil action under this section damages in an amount equal to the plaintiff's total costs of collecting and recycling discarded covered batteries in this state during the period alleged, multiplied by the defendant's allocated share of the weight of discarded covered batteries collected by the plaintiff in excess of the plaintiff's stewardship program sort goal.

(d) In addition to an award of damages under Subsection (c), the court may award a plaintiff stewardship organization that prevails in a civil action under this section the plaintiff's litigation costs, including court costs and reasonable expenses such as attorney's fees and expert witness fees, if the court finds that the award of litigation costs will serve the interests of justice.

(e) In a civil action brought under this section, a plaintiff stewardship organization's stewardship program sort goal and a defendant's allocated share must be determined using the total data collected from sorting 500 pounds of discarded covered batteries collected at each of not fewer than three locations in this state reasonably believed to be representative of the population of this state. Generated data must include:

(1) the brands of collected discarded covered batteries;

(2) the weight of each brand collected; and

(3) the percentage shares of the total collected weight attributable to each identifiable brand and to all discarded covered batteries not identifiable by brand.

(f) The sorting of discarded covered batteries described by Subsection (e):

(1) may be undertaken at any time after the plaintiff stewardship organization's stewardship program is approved by the commission under Section 361.475; and

(2) may not take place over a period that exceeds five years.

(g) A stewardship organization described by Subsection (b)(1) may not commence a civil action under this section unless the stewardship organization gives written notice stating the amount of the claim and the basis for its calculation to each defendant not later than the 60th day before the date the action commences.

(h) A civil action under this section may be brought against one or more defendants.

SECTION 2. (a) Not later than February 1, 2018, the Texas Commission on Environmental Quality shall adopt any rules or forms needed to implement Subchapter P, Chapter 361, Health and Safety Code, as added by this Act.

(b) Not later than March 1, 2018, the Texas Commission on Environmental Quality shall begin accepting plans seeking approval for and approving stewardship programs established under Subchapter P, Chapter 361, Health and Safety Code, as added by this Act.

(c) A producer of covered batteries is not required to implement a stewardship program under Subchapter P, Chapter 361, Health and Safety Code, as added by this Act, before September 1, 2018.

(d) This Act may not be enforced before September 1, 2018.

(e) The first report required by Section 361.476, Health and Safety Code, as added by this Act, is due September 1, 2020.

SECTION 3. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2017.