Establishes a beverage container fee and deposit program.

A BILL FOR AN ACT

SECTION 1. The legislature finds that recycling is an important element of an integrated solid waste management system, that can protect and preserve environmental resources and reduce economic costs to residents and businesses within the state. The legislature finds a need to expand participation in residential recycling programs and minimize costs to participants and to government. This measure will increase participation and recycling rates, provide a connection between manufacturing decisions and recycling program management, and reduce litter.

SECTION 2. Chapter 342G, Hawaii Revised Statutes, is amended as follows:

1. By amending its title to read:

"[[]PART VII.[]] GLASS AND BEVERAGE CONTAINER RECOVERY"

2. By designating sections 342G-82 to 342G-87 as:

"B. Glass Container Recovery"

4. By adding two new subparts to be appropriately designated and inserted to read:

§342G-A Definitions. As used in this part, unless the context requires otherwise:

"Beverage" means beer, ale or other drink produced by fermenting malt, spirits, wine, wine coolers, tea and coffee drinks regardless of dairy-derived product content, soda or noncarbonated water, and all nonalcoholic drinks in liquid form and intended for internal human consumption, except for dairy-derived products.

The term "beverage" excludes the following:

"Beverage container" means the individual, separate, sealed glass, aluminum, plastic bottle, or can used for containing, at the time of sale to the consumer, one gallon (3.8 liters) or less of a beverage intended for use or consumption in this state.

"Beverage distributor" means a person who is a manufacturer of beverages in beverage containers in the State of Hawaii, or who imports and engages in the sale of filled beverage containers to a dealer or consumer. The term includes federal agencies and military distributors, but does not include airlines and shipping companies that merely transport beverage containers.

"Consumer" means a person who buys a beverage for use or consumption.

"Dealer" means a person who engages in the sale of beverages in beverage containers to a consumer for off-premises consumption in the state.

"Glass container importer" means any person who is engaged in the manufacture of glass containers within the State or who imports glass containers from outside the State for sale or use within the State. The term includes federal agencies and military distributors, but does not include airlines and shipping companies that merely transport glass containers.

"Glass incentive" means an incentive paid to licensed recyclers for recycling glass containers. The incentives may be structured to include the costs of collection and processing, and a "buy back" incentive to increase participation by public and private haulers.

"Glassphalt" means an asphaltic concrete mixture using crushed glass, under controlled gradation conditions, as a substitute for a percentage of the aggregate in the mix.

"Glass recovery program" means a program for glass recovery and reuse for purposes including but not limited to:

"Import" means to buy, bring, or accept delivery of glass containers from an address, supplier, or any entity outside of the State of Hawaii

"Importer" means any person who buys, brings, or accepts delivery of beverages in containers from outside the state for sale or use within the state.

"Initiate a deposit" means to be the first person to charge a deposit on a specific beverage container.

"On-premises consumption" means beverages are consumed by a customer immediately and within the area under control of the establishment, including but not limited to bars, restaurants, passenger ships, and airplanes.

"Private label beverages" means beverages purchased:

"Recyclable" means that the beverage container is made of one of the following materials: metal, glass, single layer polyethylene terephthalate (PET) or high density polyethylene (HDPE), that can be recovered from the waste stream and recycled in total or in part for the same or other uses.

"Recycling facility" means all contiguous land and structures and other appurtenances, and improvements on the land used for the collection, separation, recovery, and sale of reuse of secondary resources that would otherwise be disposed of as municipal solid waste, and is an integral part of a manufacturing process aimed at producing a marketable product made of postconsumer material.

"Redemption center" means an operation that:

"Refillable beverage container" means any glass or plastic beverage container, or other beverage container, that ordinarily would be returned to the manufacturer to refilled and resold.

"Redeemer" means a person, other than a dealer or distributor, who demands the refund value in exchange for the empty beverage container.

"Reverse vending machine" means a mechanical device, that accepts one or more types of empty beverage containers and issues a cash refund or a redeemable credit slip with a value not less than the containers refund value. The refund value payments shall be aggregated and then paid if more than one container is redeemed in a single transaction.

§342G-B Rules, commencement. The department shall adopt rules pursuant to chapter 91 necessary for the purposes of this part. Rules shall be adopted on or before December 31, 2002. Full implementation of the beverage container deposit program under subpart D shall commence no later than October 1, 2003.

§342G-C Beverage container requirements. No person may sell, distribute, collect, or redeem in this state a beverage container that has not received approval from the director as a recyclable.

§342G-D Beverage container fee. (a) Every beverage distributor shall pay to the department a beverage container fee on each beverage container manufactured in or imported into the state. The fee shall be imposed only once on a beverage container. From October 1, 2002, the fee shall be 2 cents per beverage container.

(b) The department, with the assistance from the county solid waste divisions, shall evaluate the amount of beverage containers recovered during the first fifteen months of the fully implemented beverage container deposit program specified in subpart D of this part, and recommend to the legislature any modification in the fee structure to meet the beverage container deposit program funding requirements. Thereafter, prior to the convening of the legislative session in each subsequent even-numbered year, the department, in coordination with the counties, shall report to the legislature on the effectiveness of the program and make appropriate recommendations for modification of the fee.

(c) No county shall impose or collect any assessment or fee on beverage containers for the same or similar purpose that is the subject of this chapter.

§342G-E Beverage distributors; registration, recordkeeping requirements. (a) By July 1, 2002, all beverage distributors operating within the state shall register with the department, using forms prescribed by the department, and shall notify the department of any change in address or other information submitted. After July 1, 2002, any person who desires to conduct business in the state as a beverage distributor shall register with the department no later than one month prior to commencement of the business.

(b) All beverage distributors shall maintain records of beverages in beverage containers manufactured in this state as well as of the importation and exportation of beverage containers. The records shall be made available, upon request, for inspection by the department; provided that any proprietary information obtained by the department shall be kept confidential and shall not be disclosed to any other person, except:

§342G-F Deposit into beverage container deposit fund; use of funds. (a) There is established in the state treasury the beverage container deposit special fund, into which shall be deposited:

(b) Moneys in the fund shall be used to reimburse refund values and pay handling fees to certified redemption operations as established under subpart D of this part. The department may also use the money to:

§342G-G Beverage container inventory report and payment. (a) Payment of the beverage container fee shall be made monthly based on inventory reports of the beverage distributors. All beverage distributors shall submit to the department documentation in sufficient detail that identifies the number of beverages in beverage containers manufactured in or imported to the state, and the number of these beverage containers exported out of the state during the reporting period.

(b) The amount due from beverage distributors shall be the net number of beverage containers imported or manufactured into the state (the total number of containers imported or manufactured less the total number of containers exported) multiplied by the beverage container fee of 2 cents. Payment shall be made by check or money order payable to the Department of Health, State of Hawaii. All inventory reports and payments shall be made no later than the fifteenth day of the month following the end of the previous month.

§342G-H Contract for administrative services. The department may contract the services of a third party to administer the beverage container fee program under this subpart.

§342G-I Deposit; initiation and application. (a) Every beverage container sold in this state shall have a refund value of not less than 5 cents for a beverage container smaller than or equal to twenty-four fluid ounces, and not less than 15 cents for a beverage container larger than twenty-four fluid ounces. Each such beverage container shall have the refund value clearly indicated on it as provided in section 342G-J.

(b) The refund value of a beverage container shall be the deposit required. Once an indication of refund has been applied to a beverage container, the deposit required on that beverage container shall not be changed.

(c) The deposit on each filled beverage container shall be initiated by the beverage distributor and paid to the State of Hawaii. A beverage distributor who initiates a deposit shall charge their customers a deposit equal to the refund indicated on the beverage container at the point of sale of the beverage except for sales for on-premises consumption.

(d) Beverage distributors, who are required under subsection (c) to initiate a deposit, must also pay a beverage container fee, and register with the state in accordance with subpart C of this part.

§342G-J Beverage container requirements. (a) Except as provided in subsection (b), every beverage container sold in this state shall clearly indicate the refund value of the beverage container and the word Hawaii or the letters "HI". The names or letters representing the names of other states with comparable deposit legislation may also be included in the indication of refund value. Other indications may be required as specified by rule.

(b) Subsection (a) shall not apply to any type of refillable glass beverage container with a brand name permanently marked on it and that has a refund value of at least 5 cents for beverage containers smaller than or equal to twenty-four fluid ounces, or at least 15 cents for beverage containers larger than twenty-four fluid ounces prior to the effective date of this Act.

§342G-K Redemption of empty beverage containers. (a) Except as provided in subsection (b), a dealer shall:

(b) Subsection (a) of this section shall not apply to any dealer:

(c) All dealers, regardless of square footage, shall post a clear and conspicuous sign at each public entrance to the dealer’s place of business, that specifies the name, address, and hours of operation of the closest redemption center location or locations.

(d) If there is no redemption center within a five-mile radius of a dealer due to the square-footage exemption or revocation of redemption center certification under section 342G-K, the respective county shall operate a redemption center in the area.

§342G-L Redemption centers. (a) Any person may establish a redemption center and accept and redeem deposits on all types of empty beverage containers for which a deposit has been initiated. Any person who establishes a redemption center pursuant to this part shall obtain a permit as a solid waste management facility pursuant to chapter 342H and shall be certified by the director as a redemption center.

(b) An application for certification as a redemption center shall be filed with the department on forms prescribed by the department.

(c) The State may review, at any time, certification of a redemption center. After written notice to the person responsible for the establishment and operation of the redemption center and to the dealers served by the center, the State may, after a hearing in accordance with chapter 91, withdraw certification where there has been noncompliance with applicable laws, regulations, permit conditions, or certification requirements.

(d) Redemption centers shall pay the redeemer the full Hawaii refund value for all beverage containers, verify that all containers to be redeemed bear a valid Hawaii refund value, ensure each container collected is recycled, and forward the documentation necessary to support claims for payment as provided by section 342G-R.

(e) A redemption center’s redemption areas shall be kept in full compliance with state law, including the orders and regulations of the department.

§342G-M Reverse vending machine requirements. (a) Reverse vending machines may be used by redemption centers to satisfy the requirements of section 342G-K; provided that the reverse vending machine accepts any type of empty recyclable beverage container and pays out full refunds for containers that bear a valid Hawaii refund value. If the reverse vending machine is unable to read the Hawaii refund value, the department may specify a delayed date from which the reverse vending machine may be used. The reverse vending machine shall be routinely serviced to ensure proper operation and continuous acceptance of containers and payment of refund.

§342G-N Refusal of acceptance of a beverage container. Redemption centers shall refuse to accept any broken bottle, corroded or dismembered can, or any beverage container that:

§342G-O Handling fees and redemption values. (a) The State shall pay to each redemption center a handling fee of not less than 2 cents for each empty recyclable beverage container redeemed by a consumer and transported out of state for recycling or received by a department-permitted recycler. The handling fee must be paid in addition to the redemption value of each the empty beverage container. The department may pay the handling fee and redemption value based on the total weight of beverage containers received by material type and the average weight of each container type. The conversions shall be defined in rules.

(b) A handling fee and redemption value shall only be paid once for each container redeemed by a consumer and claimed by a redemption center.

§342G-P Distributor recordkeeping and payment requirements. (a) Each distributor who initiates a deposit on a beverage container shall maintain a record of all deposits initiated and paid to the State. Each distributor shall maintain this information according to generally accepted accounting principles and provide monthly reports to the director no later than the fifteenth day of the month following the month covered within the report. The monthly report shall contain at a minimum the quantity of distributed containers, amount of deposit by container size and type, and any other information required by the director. Payment of the deposits shall be submitted with the monthly reports.

§342G-Q Redemption center reporting. A redemption center shall prepare and maintain records of information required by the director, including:

§342G-R Recycling facility reporting. Recycling facilities, in addition to any requirements under chapter 342H, shall prepare or maintain records concerning empty beverage containers, as required by the department.

§342G-S Audit authority. The records of the beverage distributor, dealer, redemption center, and recycling facility shall be made available, upon request, for inspection by the department or a duly authorized agent of the department. Any proprietary information obtained by the department shall be kept confidential and shall not be disclosed to any other person, except:

§342G-T Deposit into beverage container deposit special fund. Revenues generated from the beverage container deposit shall be deposited into the beverage container deposit special fund as specified under section 342G-F. Moneys in the fund shall be used in accordance with section 342G-F.

§342G-U General prohibition. All contracts or agreements entered into between or among persons subject to this subpart must be consistent with this part and any implementing regulations. No such contract or agreement may be designed to hinder or frustrate the purpose or intent of this subpart."

SECTION 3. Section 36-27, Hawaii Revised Statutes, is amended to read as follows:

"§36-27 Transfers from special funds for central service expenses. Except as provided in this section, and notwithstanding any other law to the contrary, from time to time, the director of finance, for the purpose of defraying the prorated estimate of central service expenses of government in relation to all special funds, except the:

shall deduct five per cent of all receipts of all other special funds, which deduction shall be transferred to the general fund of the State and become general realizations of the State. All officers of the State and other persons having power to allocate or disburse any special funds shall cooperate with the director in effecting these transfers. To determine the proper revenue base upon which the central service assessment is to be calculated, the director shall adopt rules pursuant to chapter 91 for the purpose of suspending or limiting the application of the central service assessment of any fund. No later than twenty days prior to the convening of each regular session of the legislature, the director shall report all central service assessments made during the preceding fiscal year."

SECTION 4. Section 342G-71, Hawaii Revised Statutes, is amended to read as follows:

"[[]§342G-71[]] Penalties. Any person who violates any provision of this chapter or any rule adopted pursuant to this chapter shall be fined not more than $10,000 for each separate offense. Each day of each violation shall constitute a separate offense. Any action taken to impose or collect the penalty provided for in this section shall be [considered a civil action.] via field citations, or administrative, civil, or criminal actions."

SECTION 5. Section 342G-72, Hawaii Revised Statutes, is amended to read as follows:

"[[]§342G-72[]] Enforcement. [The department of health shall enforce this chapter.] (a) If the director determines that any person has violated or is violating any provision of this chapter, any rule adopted pursuant to this chapter, or any term or condition of a permit or certification issued pursuant to this chapter, the director may do any one or more of the following:

(b) Any order issued pursuant to this section may include a suspension, modification, or revocation of a certification issued under this chapter, and shall state with reasonable specificity the nature of the violation.

(c) Any order issued under this chapter shall become final, unless not later than twenty days after the notice of order is served, the person or persons named therein request in writing a hearing before the director. Any penalty imposed under this chapter shall become due and payable twenty days after the notice of penalty is served unless the person or persons named therein request in writing a hearing before the director. Whenever a hearing is requested on any penalty imposed under this chapter, the penalty shall become due and payable only upon completion of all review proceedings and the issuance of a final order confirming the penalty in whole or in part. Upon request for a hearing, the director shall require that the alleged violator or violators appear before the director for a hearing at a time and place specified in the notice and answer the charges complained of.

(d) Any hearing conducted under this section shall be conducted as a contested case under chapter 91. If after a hearing held pursuant to this section, the director finds that a violation or violations have occurred, the director shall affirm or modify any penalties imposed, modify or affirm the order previously issued, or issue an appropriate order or orders for the prevention, abatement, or control of the violation involved, or for the taking of such other corrective action as may be appropriate. If, after a hearing on an order or penalty contained in a notice, the director finds that no violation has occurred or is occurring, the director shall rescind the order or penalty. Any order issued after hearing may prescribe the date or dates by which the violation or violations shall cease and may prescribe timetables for necessary action in preventing, abating, or controlling the violation.

(e) If the amount of any penalty is not paid to the department within thirty days after it becomes due and payable, the director may institute a civil action in the name of the State to collect the administrative penalty which shall be a government realization. In any proceeding to collect the administrative penalty imposed, the director need only show that:

(f) In connection with any hearing held pursuant to this section, the director shall have the power to subpoena the attendance of witnesses and the production of evidence on behalf of all parties."

SECTION 6. Section 342G-82, Hawaii Revised Statutes, is amended to read as follows:

"[[]§342G-82[]] Advance disposal fee. (a) Every glass container importer shall pay to the department an advance disposal fee. The fee shall be imposed only once on the same glass container and shall not be assessed on drinking glasses, cups, bowls, plates, ashtrays, and similar tempered glass containers. For the period September 1, 1994, to [September 1, 1996] September 30, 2001, the fee shall be one and one-half cents per glass container. [Thereafter, the fee shall be set by the legislature at a rate the legislature determines will permit funding of county glass recovery programs as required to achieve the following glass recovery programs as required to achieve the following glass recovery program goals:

(b) In January 1995, the department, with assistance from the county solid waste division, shall evaluate the amount of glass recovered during the first fifteen months of the program and recommend to the legislature any modification in the fee structure to meet county glass recovery program funding requirements. Thereafter, prior to the convening of the legislative session in each subsequent even-numbered year, the department of health, in coordination with the counties, shall report to the legislature on the effectiveness of the program and make appropriate recommendations for modification of the fee.] From October 1, 2001, the fee shall be two cents per container. From October 1, 2002, the glass advance disposal fee of two cents per container shall only apply to glass containers that are not glass beverage containers as defined in this part.

[(c)](b) The legislature shall have exclusive authority over all matters subject to this chapter.

[(d)](c) No county shall impose or collect any assessment or fee on glass containers for the same or similar purpose that is [[]the[]] subject of this chapter."

SECTION 7. Section 342G-83, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) All glass container importers shall maintain records reflecting the manufacture of their glass containers as well as the importation and exportation of products packaged in glass. The records shall identify the type (glass beverage container or non-beverage glass container) and quantity of each type of glass containers. The records shall be made available, upon request, for inspection by the department; provided that any proprietary information obtained by the department shall be kept confidential, and shall not be disclosed to any other person except:

SECTION 8. Section 342G-85, Hawaii Revised Statutes, is amended to read as follows:

"§342G-85 Container inventory report and payment. (a) Payment of the advance glass disposal fee shall be made quarterly based on inventory reports of the glass container importers, except for those importers subject to subsection (c) or (d). All glass container importers shall submit to the department documentation in sufficient detail that identifies the number of glass beverage and glass non-beverage containers manufactured or imported to the State and sold or distributed, by manufacturer or distributor, during the calendar year.

(b) [The] Until September 30, 2002, the amount due from glass container importers less glass containers exported for the calendar year shall be the sum equal to the number of glass containers provided in subsection (a) multiplied by the advance disposal fee [of 1.5 cents.] specified in section 342G-82. From October 1, 2002, the amount due from glass container importers shall be the sum equal to the number of non-beverage glass containers provided in subsection (a) less non-beverage glass containers exported, and multiplied by the advance disposal fee of 2 cents. Payment shall be made by check or money order payable to the Department of Health, State of Hawaii. All subsequent inventory reports and payments shall be made no later than the fifteenth day of the month following the end of the previous calendar quarter, except for those importers subject to subsection (d).

(c) [A] Until September 30, 2002, a glass container importer who imports fewer than five thousand glass containers within a one-year period shall be exempt from payment of the fee. [Any empty, imported glass container designed to hold not more than two and one-half fluid ounces of a product meant for human consumption shall be exempt from the fee.] From October 1, 2002, a glass container importer who imports or manufactures in the State fewer that five thousand non-beverage glass containers within a one-year period shall be exempt from payment of the fee.

(d) [A] Until September 30, 2002, a glass container importer who imports five thousand or more glass containers, but less than or equal to one hundred thousand glass containers, shall be permitted to provide a report and payment for the fee annually, rather than quarterly. From October 1, 2002, a glass container importer who imports or manufactures in the State five thousand or more non-beverage glass containers, but less than or equal to one hundred thousand non-beverage glass containers, shall be permitted to provide a report and payment of the fee annually, rather than quarterly."

SECTION 9. Section 342G-86, Hawaii Revised Statutes, is amended to read as follows:

"[[]§342G-86[]] County glass recovery programs; requirements. (a) All county glass recovery programs shall include:

(b) In addition, county programs may include but shall not be limited to:

SECTION 10. Section 342G-81, Hawaii Revised Statutes, is repealed.

["§342G-81 Definitions. As used in this part, unless the context requires otherwise:

"Glass container importer" means any person who is engaged in the manufacture of glass containers within the State or who imports glass containers from outside the State for sale or use within the State. The term includes federal agencies and military distributors, but does not include airlines and shipping companies that merely transport glass containers.

"Glass incentive" means an incentive paid to licensed recyclers for recycling glass containers. Such incentives may be structured to include the costs of collection and processing, and a "buy back" incentive to increase participation by the public and private haulers.

"Glassphalt" means an asphaltic concrete mixture utilizing crushed glass, under controlled gradation conditions, as a substitute for a percentage of the aggregate in the mix.

"Glass recovery program" means a program for glass recovery and reuse for purposes including but not limited to:

"Import" means to buy, bring, or accept delivery of glass containers from an address, supplier, or any entity outside of the State of Hawaii."]

SECTION 11. Section 342G-88, Hawaii Revised Statutes, is repealed.

["§342G-88 Penalties. Any person who violates any provision of this part, or any rule adopted thereunder, shall be fined not more than $10,000 for each separate offense. Each day of each violation shall constitute a separate offense. Any action taken to impose or collect the penalty provided for in this section shall be considered an administrative action."]

SECTION 12. Section 342G-89, Hawaii Revised Statutes, is repealed.

["[§342G-89] Enforcement. The department shall enforce this part."]

SECTION 13. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 14. This Act shall take effect on July 1, 2001.