HB647: Packaging Stewardship Program and Fund; established.
HOUSE BILL NO. 647
Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended by adding a section numbered 10.1-1424.4 as follows:
§ 10.1-1424.4. Packaging Stewardship Program; Fund; Stewardship Advisory Committee.
A. As used in this section:
"Alternative collection program" means a program for the management of packaging material operated by one or more producers that has been approved by the Department.
"Committee" means the Stewardship Advisory Committee established pursuant to this section.
"Fund" means the Packaging Stewardship Fund established pursuant to this section.
"Packaging material" means a discrete type of material, or category of material, used for the containment, protection, delivery, presentation, or distribution of a product, including a product sold over the Internet, at the time that the product leaves a point of sale with or is received by the consumer. "Packaging material" does not include a discrete type of material, or category of material, that is (i) intended to be used for the long-term storage or protection of a durable product and can be expected to be used for such purpose for at least five years; (ii) a container for architectural paint; or (iii) otherwise excluded from the definition of "packaging material" by regulations adopted by the Department.
"Perishable food" means any food that may spoil or otherwise become unfit for human consumption because of its nature, type, or physical conditions, including fresh and processed meats, poultry, seafood, dairy products, bakery products, eggs, and fresh fruit and vegetables. "Perishable food" does not include food that is sold, offered for sale, or distributed for sale frozen.
"Producer" means a person that (i) has legal ownership of the brand of a product sold, offered for sale, or distributed for sale in or into the Commonwealth that uses packaging material or (ii) is the sole entity that imports into the Commonwealth for sale, offers for sale, or distributes for sale a product that uses packaging material. "Producer" includes the franchisor of a franchise located in the Commonwealth, but does not include the franchisee operating the franchise. "Producer" does not include a nonprofit organization exempt from taxation under § 501(c)(3) of the Internal Revenue Code.
"Program" means the Packaging Stewardship Program established pursuant to this section.
"Stewardship organization" means an organization with which the Department has entered into a contract pursuant to subsection B to administer the provisions of the Program.
B. The Department may contract with a stewardship organization to administer the provisions of the Program.
C. The Department or the stewardship organization shall conduct a statewide recycling needs assessment that shall evaluate (i) current funding needs affecting recycling access and availability; (ii) capacity, costs, and needs associated with the collection and transportation of recyclable material; (iii) the processing capacity, market conditions, and opportunities for recyclable material; (iv) consumer education needs with respect to recycling and reducing contamination in collected recyclable material; and (v) any other evaluation deemed necessary by the Department.
D. 1. Beginning January 1, 2023, a producer shall pay an annual fee to the Department, to be deposited into the Fund, based on the net weight of each type of packaging material sold, offered for sale, or distributed for sale by the producer and not otherwise managed by the producer under an approved alternative collection program. The Department shall develop regulations setting forth the calculation and determination of fees due pursuant to this subsection. The fees shall take into account whether a type of packaging material is readily recyclable or not readily recyclable so as to incentivize the use of readily recyclable packaging materials by producers.
2. Subject to approval by the Department, a producer or group of producers may develop and operate an alternative collection program to collect and manage some or all types of packaging materials sold, offered for sale, or distributed for sale in or into the Commonwealth by the producer through reuse, recycling, and where appropriate, incineration. Development and operation of an alternative collection program may be used to partially or fully offset the amount of fees owed by a producer pursuant to subdivision 1 for the types of packaging materials accepted into the alternative collection program. The Department shall establish regulations governing application for approval and terms of approval for an alternative collection program.
3. A producer shall be exempt from the requirements of this section in any calendar year in which:
1. For calendar years 2023 and 2024, the producer realized less than $2 million in total gross revenue during the prior calendar year, or for calendar years 2025 and later, the producer realized less than $5 million in total gross revenue during the prior calendar year;
2. The producer sold, offered for sale, or distributed for sale in or into the Commonwealth products using less than one ton of packaging material in total;
3. The producer realized more than 50 percent of its total gross revenue in the prior calendar year from the sale of goods acquired through insurance salvages, closeouts, bankruptcies, or liquidations; or
4. The producer primarily sold, offered for sale, or distributed for sale in or into the Commonwealth to retailers or directly to consumers products that were perishable food that used less than 15 tons of packaging material in total.
E. 1. A locality may participate in the Program by providing for the collection and recycling of packaging material that is generated in the locality. A participating locality shall annually report to the Department or the stewardship organization, on a form provided by the Department, information necessary to determine the locality's costs associated with collection, processing, transporting, and recycling or otherwise managing packaging material. Two or more localities may jointly participate in operating a local collection program pursuant to this subsection.
2. A participating locality shall be eligible for an annual disbursement from the Fund based on the median per-ton cost of managing packaging material that is readily recyclable and the median per-ton cost of managing packaging material that is not readily recyclable.
F. There is hereby created in the state treasury a special nonreverting fund to be known as the Packaging Stewardship Fund. The Fund shall be established on the books of the Comptroller. All fees received from producers pursuant to this section shall be paid into the state treasury and credited to the Fund. Interest earned on moneys in the Fund shall remain in the Fund and be credited to it. Any moneys remaining in the Fund, including interest thereon, at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund. Moneys in the Fund shall be used solely for the purposes of (i) disbursing funds to participating localities pursuant to subsection E; (ii) covering the operating costs of the Department and, if appropriate, the stewardship organization in administering the Program, including costs related to the adoption of rules and regulations; and (iii) investments in recycling infrastructure and recycling education by the Department or by the stewardship organization upon approval by the Department. No funds shall be used for programs converting plastics to fuel or feedstock. Expenditures and disbursements from the Fund shall be made by the State Treasurer on warrants issued by the Comptroller upon written request signed by the Director.
G. 1. The Stewardship Advisory Committee is established as an advisory committee in the executive branch of state government. The purpose of the Committee is to review the Program and make recommendations concerning its operation to the Director. The Committee shall have a total membership of 23 nonlegislative citizen members to be appointed by the Director as follows: (i) four representatives of local government representing different urban and rural geographic areas of the Commonwealth; (ii) one representative of a Tribal Nation or indigenous service organization; (iii) one representative of a special purpose district; (iv) two representatives of community-based organizations representing vulnerable populations; (v) two representatives of environmental nonprofit organizations; (vi) one owner or operator of a small business not eligible under clause (vii), (viii), or (ix); (vii) six representatives of the recycling industry, including local government service providers, solid waste collection companies or associations, material recovery facilities, or other processing facilities; (viii) four representatives of producers of covered products or producer trade associations representing different types of covered products; and (ix) two representatives of packaging suppliers that are not producers, each representing a different material category.
2. Appointments to fill vacancies, other than by expiration of a term, shall be for the unexpired terms. Vacancies shall be filled in the same manner as the original appointments. All members may be reappointed. After the initial staggering of terms, nonlegislative citizen members shall be appointed for a term of four years.
3. The Committee shall elect a chairman and vice-chairman from among its membership. A majority of the members shall constitute a quorum.
4. All members shall be reimbursed for all reasonable and necessary expenses incurred in the performance of their duties as provided in §§ 2.2-2813 and 2.2-2825. Funding for the costs of compensation and expenses of the members shall be provided by the Department.