89R2897 DRS-F

By: Johnson S.B. No. 728

A BILL TO BE ENTITLED

AN ACT

relating to an incentive program to promote beverage container recycling.

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

SECTION 1. Subtitle B, Title 5, Health and Safety Code, is amended by adding Chapter 375 to read as follows:

CHAPTER 375. BEVERAGE CONTAINER RECYCLING REFUND PROGRAM

Sec. 375.001. DEFINITIONS. In this chapter:

(1) "Beverage" means an alcoholic, nonalcoholic, carbonated, or noncarbonated drink prepared in liquid, ready-to-drink form and intended for human consumption.

(2) "Beverage container" means a glass, metal, or plastic vessel that is hermetically sealed or capped and that contains a beverage at the time it is sold or offered for sale. The term does not include a container that:

(A) has a fluid capacity of more than one gallon;

(B) contains milk or another dairy product;

(C) contains infant formula, including any liquid food sold as an alternative for human milk for the feeding of infants; or

(D) contains medical food, including:

(i) a liquid food that is formulated to be consumed or administered under the supervision of a physician and that is intended for specific dietary management of diseases or health conditions for which distinctive nutritional requirements, based on recognized scientific principles, are established by medical evaluation; and

(ii) a product that meets the definition of a medical food under Section 5(b) of the Orphan Drug Act (21 U.S.C. Section 360ee(b)).

(3) "Commission" means the Texas Commission on Environmental Quality.

(4) "Consortium" means the Texas Beverage Container Recycling Consortium established under this chapter.

(5) "Consumer" means a person who purchases at retail a beverage in a beverage container. The term includes a lodging, eating, or drinking establishment if beverages are generally consumed on the establishment's premises. The term does not include a person who purchases a beverage from a lodging, eating, or drinking establishment for consumption on the establishment's premises.

(6) "Redemption center" means a staffed or unstaffed operation approved by the consortium under this chapter that redeems returned empty beverage containers by collecting beverage containers from persons who deliver to the operation beverage containers and issuing to a person delivering beverage containers a refund for each with a value not less than the beverage container's refund value.

(7) "Refund" means a payment by a redemption center to a person who presents a beverage container at the redemption center.

(8) "Refund program" means the beverage container recycling program established under this chapter.

Sec. 375.002. RULES. The commission may adopt rules to administer this chapter. The commission may consult the 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) Except as provided by Subsection (b), for purposes of this chapter, the following person is considered to be the producer of a beverage sold, offered for sale, or distributed in or imported into this state:

(1) the manufacturer of the beverage, if the beverage is sold in a beverage container:

(A) under the brand of the manufacturer; or

(B) that does not identify the brand;

(2) if a person described by Subdivision (1) cannot be identified, the person licensed to manufacture the beverage and sell or offer to sell the beverage to consumers in this state in a beverage container under the brand or trademark of another person;

(3) if a person described by Subdivision (1) or (2) cannot be identified, the owner of the beverage brand;

(4) if a person described by Subdivision (1), (2), or (3) cannot be identified, the importer of record for the beverage into the United States for use in a commercial enterprise that sells, offers for sale, or distributes the beverage in this state; or

(5) if a person described by Subdivision (1), (2), (3), or (4) cannot be identified, the person that first distributes the beverage in this state.

(b) A person is not considered to be a producer for purposes of this chapter if the person:

(1) is a state, a federal or state agency, a political subdivision, or another governmental entity;

(2) 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

(3) sells, offers for sale, or distributes in or imports into this state beverages in an amount that the commission determines to be a de minimis amount.

Sec. 375.004. CONSORTIUM REQUIRED; NON-JOINING PRODUCERS. (a) Producers shall form, and a producer shall participate in, the Texas Beverage Container Recycling Consortium. The consortium must be a nonprofit corporation under Chapter 22, Business Organizations Code, that is formed for the purpose of creating and implementing a plan to meet and maintain the recycling rate target provided by Section 375.009.

(b) The consortium may sue a producer that has not joined the consortium in an appropriate court to require compliance with the duty to join the consortium. The consortium may recover court costs and attorney's fees if it prevails in a suit brought under this subsection.

(c) The consortium shall:

(1) 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;

(2) establish quality standards for beverage containers accepted for refund; and

(3) collect and provide to the commission information necessary to enable the commission 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. Money, including beverage container deposits, collected under this chapter shall be deposited to the credit of a recycling refund trust fund maintained by the consortium in a depository chosen by the consortium. Money in the trust fund may be allocated and spent only for:

(1) the construction, operation, and maintenance of redemption centers;

(2) the operation of technology-based redemption centers, including reverse vending machines and bag-drop receptacles, that provide convenient cost-effective methods of paying refunds;

(3) leasing agreements for and liability insurance on redemption centers;

(4) refund payments to persons, including curbside recycling programs, that return a beverage container to a redemption center, or through other means as determined by the consortium, that meet quality standards determined by the consortium and that receive a refund;

(5) reimbursing a local governmental entity or independent entity operating a redemption center, as authorized by the consortium, for refunds paid to persons, including curbside recycling programs, returning beverage containers that meet quality standards determined by the consortium;

(6) reimbursing a governmental or other entity that provides beverages free of charge to the public during a declared disaster;

(7) providing information to and educating consumers about the refund program; and

(8) administering and managing the consortium.

Sec. 375.006. COMPTROLLER OVERSIGHT; RESERVES. The comptroller may:

(1) require the consortium to provide financial information;

(2) conduct financial audits of the refund program; and

(3) require the consortium to maintain reserves in an amount determined by the comptroller in accordance with applicable financial accounting standards.

Sec. 375.007. LABEL AND DEPOSIT REQUIRED. (a) A person may not sell, offer for sale, or distribute in or import into this state a beverage in a beverage container unless the beverage container meets labeling standards established by the consortium.

(b) A person may not sell at retail in this state a beverage in a beverage container unless the person collects or provides for the collection of a deposit on the beverage container in a manner established by the consortium.

Sec. 375.008. DEPOSITS AND REFUNDS FOR BEVERAGE CONTAINERS. The consortium shall 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) The consortium shall 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) 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, the commission may require the consortium to remit to the state all or part of the money in the recycling refund trust fund established under Section 375.005. The comptroller shall hold money remitted under this subsection until the consortium or another organization provides to the commission a corrective plan to meet the recycling rate target provided by Subsection (a).

(c) On approval by the commission of the corrective plan, the comptroller shall release the money remitted and held under Subsection (b) to the consortium or other organization responsible for the plan.

(d) The commission may audit the consortium for accuracy and adherence to the recycling rate target provided by Subsection (a). The consortium shall reimburse the commission for the cost incurred by the commission in the audit process.

SECTION 2. (a) Not later than September 1, 2026, the Texas Commission on Environmental Quality shall adopt rules for the implementation of Chapter 375, Health and Safety Code, as added by this Act. To facilitate the approval of the structure and organization of the Texas Beverage Container Recycling Consortium and the consortium's initial plan, the commission may adopt the initial rules in the manner provided by law for emergency rules.

(b) Except as otherwise provided by this Act, 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, shall comply with those requirements beginning January 1, 2028.

SECTION 3. (a) Except as provided by Subsection (b) of this section, this Act takes effect September 1, 2025.

(b) Section 375.007, Health and Safety Code, as added by this Act, takes effect October 1, 2028.