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.