Hawaii-2023-SB1458-Introduced

PART I

SECTION 1. The legislature finds that as the State strives to fulfill its commitments to reduce waste and effectively mitigate the impacts of climate change, extended producer responsibility policies offer an opportunity to create mutually beneficial partnerships with the businesses that produce packaging waste.

Extended producer responsibility policies are designed to transfer some portion of the costs of managing the waste generated by the sale of consumer goods to the entities that produce those goods. These policies stand in contrast to existing policies that place this responsibility solely on taxpayers. The failure of recycling programs and the multiple crises created by plastic pollution, which fouls air, water, and biological systems worldwide, are the primary drivers leading to the call for such innovative solutions.

The legislature further finds that Hawaii has a unique role to play in creating extended producer responsibility solutions due to the State's relatively small resident population, remote location bounded by the Pacific ocean, and global image as a relatively pristine environment. The fact that the islands attract millions of visitors each year adds to Hawaii's value as a proving ground for forward-thinking waste reduction initiatives.

The legislature also finds that the corporations that produce the greatest volume of consumer goods have a correspondingly unique role to play in solving the problems caused by the proliferation of packaging waste. Among these corporations, sixteen of the top twenty are signatories to the Global Commitment for a New Plastics Economy, an initiative developed by the Ellen MacArthur Foundation and the United Nations Environmental Programme as a primary means for implementing waste-related sustainable development goals. These existing commitments have signatories who are on track to reduce the volume of plastic packaging waste that their business models generate and ensure that whatever remains is either reusable, recyclable, or compostable.

The legislature also finds that the inclusion of a $350,000,000 "recycling is infrastructure too" package in the federal bipartisan Infrastructure Investment and Jobs Act of 2021 offers unprecedented opportunities for the State and its counties to leverage taxpayer funding and producer contributions to attract significant funding to the State for the purpose of revamping and revitalizing Hawaii's waste diversion programs.

Finally, the legislature finds that although reuse strategies offer far greater benefits than recycling programs, these strategies have historically failed to gain the resources needed to develop and ensure success.

The purpose of this Act is to establish an extended producer responsibility program that:

(1) Is particularly suited to Hawaii;

(2) Engages the producers best suited to eliminate packaging waste in a fair and balanced way;

(3) Positions the State to take full advantage of federal funding aimed at reducing waste; and

(4) Prioritizes reuse strategies as the most effective way to accomplish this goal.

PART II

SECTION 2. Definitions. As used in this Act:

"Baseline volume" means the volume of packaging waste a county sends to a landfill or a power plant that burns municipal solid waste as a fuel, or both, during the calendar year beginning and ending on a date determined by rule.

"Brand" means a symbol, word, or mark that identifies a fast-moving consumer good.

"Covered material or product" means, regardless of recyclability:

(1) Any part of a package or container, including material that is used for the containment, protection, handling, delivery, and presentation of a product that is sold, offered for sale, imported, or distributed in the State; and

(2) Primary, secondary, and tertiary packaging intended for the consumer market; service packaging designed and intended to be filled at the point of sale, including carry-out bags and bulk goods bags; and beverage containers.

"Covered producer" means a producer that either:

(1) Produces a packaging volume of more than ten thousand metric tons internationally; or

(2) Has international gross sales of fast-moving consumer goods of more than $500,000,000.

"Department" means the department of health.

"Fast-moving consumer good" means a:

(1) Non-durable consumer good that is packaged using a covered material or product; or

(2) Covered material or product if the covered material or product is being sold as a product instead of being used as packaging.

"Person" means any individual, business, partnership, limited liability company, corporation, not-for-profit organization, association, government entity, public benefit corporation, or public authority.

"Packaging volume" means the packaging volume that a producer places on the market.

"Producer" means any person, except for the State or any of its political subdivisions, that:

(1) Manufactures a fast-moving consumer good under the person's own name or brand; and

(2) Either:

(A) Sells, offers for sale, distributes, or imports a fast-moving consumer good as owner or licensee of a trademark or brand under which a fast-moving consumer good is sold or distributed in the State; or

(B) Sells, offers for sale, or distributes a fast‑moving consumer good in the State.

"Program year" means a full calendar year beginning and ending on a date determined by rule; provided that the final program year shall be determined by rule.

"Reuse" means to extend the life of a product, package, or resource by either using more than once with little to no processing (same or new function), repairing it so it can be used longer, or sharing, renting, selling, or donating it to another party. This definition excludes materials used as a fuel substitute and those used for energy production (i.e. incineration).

SECTION 3. Sales prohibition. Beginning and ending on a date determined by rules adopted by the department, no covered producer shall sell or offer for sale any fast-moving consumer good for delivery in this State unless the covered producer has registered pursuant to section 4 of this Act and complied with any other applicable provisions of this Act.

SECTION 4. Fast-moving consumer good covered producer responsibility. (a) Beginning on a date determined by rules adopted by the department, each covered producer shall register with the department and pay to the department a fee as provided in subsection (e).

(b) Each covered producer who is registered shall submit an annual renewal of its registration by January 1 of each subsequent program year, with the payment of a fee as provided in subsection (e).

(c) The registration and each renewal shall include a list of all of the covered producer's brands of fast-moving consumer goods and shall be effective on the second day of the succeeding month after receipt by the department of the registration or renewal.

(d) The registration and each renewal shall include the covered producer's sales volume for the preceding year and the estimated packaging volume placed in the market in the State by the covered producer's sales volume during that year. The packaging volume generated in the State shall be used to calculate the fee in subsection (e).

(e) The fee to be paid at the time of registration or renewal shall be $100 for each metric ton of packaging placed in the market in the State by the covered producer.

SECTION 5. Extended producer responsibility special fund. (a) There is established in the state treasury the extended producer responsibility special fund into which shall be deposited:

(1) All fees, payments, and penalties collected by the department pursuant to this Act;

(2) Any appropriation by the legislature into the special fund;

(3) Any grant or donation made to the special fund; and

(4) Any interest earned on the balance of the special fund.

(b) The extended producer responsibility special fund shall be administered by the department.

(1) Beginning with a fiscal year determined by rule, the department shall allocate moneys to each county for the costs of creating the countywide needs assessment required pursuant to section 6;

(2) Funds in excess of those required to cover the costs of the countywide needs assessments shall be awarded by the department to qualified applicants for projects and programs that eliminate packaging waste through the development of reuse and refill systems within the State;

(A) The department shall have the authority to subcontract the administration of a grant program to a qualified nonprofit that will process applications and make awards; provided that no producer regulated under the law is connected to the nonprofit in charge of managing the awards in a way that could impact the award process.

(3) Any distribution of funds pursuant to this subsection shall be approved by the department. The department shall approve or deny a proposal for funding within ninety days of receipt of a proposal. The proposals for funding may be approved, at the discretion of the department; provided that the proposal will, at a minimum:

(A) Eliminate packaging waste;

(B) Increase the transition of packaging from non-reusable to reusable or refillable packaging;

(D) Increase the capacity of reuse and refill infrastructure, programs, and projects and the State;

(E) Provide reuse and refill instruction that are, to the extent practicable, consistent statewide, easy to understand, translated into various commonly-used languages, and easily accessible; and

(F) Provide for outreach and education that are coordinated across programs or regions to avoid confusion for residents, and developed in consultation with local government and the public; and

(4) The department may expend an amount not to exceed $ in each fiscal year to administer the extended producer responsibility program established by this Act.

SECTION 6. Needs assessment. (a) Each county shall develop a countywide needs assessment, which shall:

(1) Detail the resources needed to reduce the volume of packaging waste the county sends to landfills by fifty per cent from the respective county's baseline volume by a date determined by rule; provided that for a county with a population greater than five hundred thousand, the needs assessment shall detail the resources needed to reduce by fifty per cent of its baseline volume the volume of packaging waste the county sends to a landfill or to a power plant that burns municipal solid waste as a fuel; provided further that a county with a population greater than five hundred thousand shall categorize its resource needs by method of packaging waste disposal; and

(2) Detail the resources needed to reduce the amount of packaging waste the county sends to a landfill by eighty per cent from the respective county's baseline volume by a date determined by rule; provided that for a county with a population greater than five hundred thousand, the needs assessment shall detail the resources needed to reduce by eighty per cent of its baseline volume the amount of packaging waste the county sends to a landfill or to a power plant that burns municipal solid waste as a fuel; provided further that a county with a population greater than five hundred thousand shall categorize its resource needs by method of packaging waste disposal.

(b) Each county shall submit its countywide needs assessment to the department no later than a date determined by rule. The department shall compile the assessments and consolidate them along with any recommendations made by the counties and shall work with the counties and registered covered producers to establish guidelines on the use of moneys in the extended producer responsibility special fund; provided that priority shall be given to packaging reuse programs.

(c) The department shall submit an annual report to the legislature no later than twenty days prior to the convening of each regular session beginning after the establishment of the extended producer responsibility program that contains a summary of:

(1) County needs assessments;

(2) Moneys deposited into the extended producer responsibility special fund;

(3) The use of any moneys from the extended producer responsibility special fund; and

(4) Any other findings and recommendations, including any proposed legislation.

SECTION 7. Financial and proprietary information; report. Notwithstanding any law to the contrary, financial or proprietary information, including trade secrets, commercial information, and business plans, submitted to the department under this Act shall be confidential and exempt from public disclosure to the extent permitted by chapter 92F, Hawaii Revised Statutes.

SECTION 8. Rules. The department may adopt rules pursuant to chapter 91, Hawaii Revised Statutes, necessary to implement this Act.

SECTION 9. Enforcement. (a) The department may conduct or require audits and conduct inspections to determine compliance under this Act. Except as provided in subsection (c), the department and the attorney general shall be empowered to enforce this Act and take necessary action against any covered producer for failure to comply with this Act or rules adopted thereunder.

(b) The attorney general may file suit in the name of the State to enjoin an activity related to the sale of fast-moving consumer goods in violation of this Act.

(c) The department shall issue a warning notice to a person for the person's first violation of this Act. The person shall comply with this Act within sixty days of the date the warning notice was issued or be subject to the penalties provided by law or rule, including but not limited to penalties set forth in subsections (d) and (e).

(d) Any person who violates any requirement of this Act may be assessed a penalty of up to $1,000 for the first violation and up to $2,000 for the second and each subsequent violation, in addition to any additional penalties required or imposed pursuant to this Act; provided that each day of continued violation shall constitute a separate violation.

(e) The department shall determine additional penalties based on adverse impact to the environment, unfair competitive advantage, and other considerations that the department deems appropriate.

SECTION 10. Administrative penalties; fees. In addition to any other administrative or judicial remedy provided by this Act or rules adopted under this Act for a violation thereof, the department may impose by order administrative penalties; set, charge, and collect administrative fines; recover administrative fees and costs, including attorney's fees and costs; and bring legal action to recover administrative fines and fees and costs, including attorney's fees and costs.

SECTION 11. Applicability. This Act shall not apply to any material that is used in the packaging of a product that is regulated as a drug, medical device, or dietary supplement by the U.S. Food and Drug Administration under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 321 et seq., sec. 3.2(e) of 21 U.S. Code of Federal Regulations or the Dietary Supplement Health and Education Act.

PART III

SECTION 12. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2023-2024 for deposit into the extended producer responsibility special fund established in section 5 of this Act.

SECTION 13. There is appropriated out of the extended producer responsibility special fund the sum of $ or so much thereof as may be necessary for fiscal year 2024-2025 for the counties to prepare countywide need assessments; provided that the moneys shall be expended as follows:

County of Hawaii $

County of Kauai $

County of Maui $

City and county of Honolulu $

The sums appropriated shall be expended by the respective county for the purposes of this Act.

The sum appropriated shall constitute the State's share of the cost of the mandated program under article VIII, section 5, of the state constitution.

SECTION 14. There is appropriated out of the extended producer responsibility special fund the sum of $ or so much thereof as may be necessary for fiscal year 2023-2024 for the administration of the extended producer responsibility program.

The sum appropriated shall be expended by the department of health for the purposes of this Act.

SECTION 15. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2023-2024 for one full-time equivalent (1.0 FTE) position for the extended producer responsibility program to develop rules, oversee and manage goals and objectives related to waste management, analyze and assess waste reduction targets, and develop reports.

The sum appropriated shall be expended by the department of health for the purposes of this Act.

SECTION 16. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 17. This Act shall take effect on July 1, 2023, and shall be repealed five years after the adoption of the rules promulgated by the department to implement this Act; provided that if there are moneys remaining in the extended producer responsibility special fund when this Act is repealed, the department of health and the counties may continue to expend the remaining moneys in a manner consistent with this Act after June 30, 2028, until all moneys have been expended.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	1458
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII